Online tax backed by minister

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.