On­line tax backed by min­is­ter

Manawatu Standard - - Business - MADI­SON REIDY AND TOM PULLAR-STRECKER

Ki­wis will have to pay GST on goods they buy on­line from over­seas, Rev­enue Min­is­ter Stu­art Nash has con­firmed.

Re­tail NZ spokesman Greg Har­ford said con­fir­ma­tion of a so­called ‘‘Ama­zon tax’’ was ‘‘out­stand­ing‘‘ for the re­tail sec­tor.

The re­tail lobby group has es­ti­mated the change would bring in $235 mil­lion a year in tax, ris­ing to $935m within nine years be­cause of the growth of in­ter­net shop­ping.

At the mo­ment, most items cost­ing less than $400 can be bought tax-free from over­seas, un­less they are items that also at­tract duty, in which case the thresh­old can fall to $240.

Speak­ing on New­stalk ZB, Nash said the new Gov­ern­ment would ‘‘ab­so­lutely’’ in­tro­duce a 15 per cent goods and ser­vices tax (GST) on on­line pur­chases from in­ter­na­tional web­sites.

In­tro­duc­ing such a tax was the ‘‘right thing to do’’, he said.

‘‘[The Na­tional] Gov­ern­ment did not do enough about this, so what hap­pened? ... A 15 per cent com­pet­i­tive ad­van­tage to those over­seas, while our re­tail­ers had to deal with GST,’’ he said.

A spokes­woman for Nash said the min­is­ter was still seek­ing ad­vice on how the tax would be ap­plied and there was no time­line yet for its in­tro­duc­tion.

Labour Fi­nance Min­is­ter Grant Robert­son did not say whether the tax change was def­i­nitely a ‘‘hap­pen­ing thing’’ when asked later yes­ter­day, in­di­cat­ing in­stead that it was still some­thing that was be­ing ‘‘in­ves­ti­gated’’, but agreed it had long been Labour pol­icy.

Na­tional Party rev­enue spokes­woman Ju­dith Collins said it had been com­mit­ted to putting GST on low-value im­ports, but in­di­cated it saw a com­pli­ca­tion with re­gard to the way Cus­toms was funded through tar­iffs and bio-se­cu­rity in­spec­tion fees.

Deloitte tax part­ner Al­lan Bul­lot said ear­lier this year that New Zealand’s cloth­ing, cos­metic, toy and book stores were ‘‘scream­ing blue mur­der’’ at over­seas web­sites nab­bing their cus­tomers with cheaper prices.

Bul­lott said tax reg­u­la­tion had not kept up with New Zealand con­sumers’ shift to buy more on­line.

For­eign com­pa­nies that sell more than A$75,000 (NZ$83,000) of goods to Aus­tralians each year will have to col­lect GST on those sales from July next year, un­der a law change that was de­layed from July last year.

Har­ford said the New Zealand Gov­ern­ment could bring in the change at the same time.

‘‘The is­sue is cost­ing the Gov­ern­ment sig­nif­i­cant amounts of money in terms of lost rev­enue and it is putting re­tail­ers at a sig­nif­i­cant price dis­ad­van­tage.’’

The Na­tional Gov­ern­ment in­tro­duced a so-called ‘‘Net­flix tax’’ last year that re­quires for­eign com­pa­nies to levy GST on all dig­i­tal ser­vices they sell to New Zealan­ders, such as stream­ing tele­vi­sion and mu­sic sub­scrip­tions.

That is if they fall above the $60,000 an­nual sales thresh­old.

Bul­lot said the ‘‘Net­flix tax’’ had brought in $113m in tax rev­enue in its first year.

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