Spot­light on pro-traders

South Waikato News - - NEWS -

In­land Rev­enue has con­firmed new leg­is­la­tion forc­ing pro­fes­sional on­line traders to re­veal them­selves and stand be­hind sec­ond­hand goods they sell at auc­tion could help it catch tax dodgers.

A Con­sumer Law Re­form Bill cur­rently await­ing its sec­ond read­ing in Par­lia­ment would ex­tend the Con­sumer Guar­an­tees Act to pro­fes­sional traders auc­tion­ing sec­ond­hand goods through Trade Me and other on­line mar­ket­places, mean­ing such traders would need to fix or of­fer re­funds for shonky used goods.

A key amend­ment to the leg­is­la­tion pro­posed this week by a se­lect com­mit­tee would oblige on­line traders to de­clare whether they were ‘‘in trade’’ or face fines of up to $10,000 – so shop­pers would know whether they were buy­ing from some­one bound by the act.

In­land Rev­enue at present pro­vides only rel­a­tively vague ad­vice to traders, say­ing that as a ‘‘gen­eral guide’’ peo­ple who sell things on a ‘‘reg­u­lar ba­sis’’ that they bought with the in­ten­tion of re­selling for a profit should be declar­ing that for in­come tax.

A spokesman said In­land Rev­enue did not in­tend to align tax and con­sumer pro­tec­tion leg­is­la­tion by adopt­ing a pro­fes­sional trad­ing def­i­ni­tion drawn up by the Con­sumer Af­fairs Min­istry.

He said one pos­si­ble re­sult of the new re­quire­ment for pro­fes­sional traders to iden­tify them­selves was that it ‘‘ may alert In­land Rev­enue to those who are not meet­ing their tax obli­ga­tions’’.

When the Con­sumer Af­fairs Min­istry drafts its new guide­lines, one rule of thumb may be the def­i­ni­tion in the Sec­ond­hand Deal­ers and Pawn­bro­kers Act.

It says peo­ple are pro­fes­sional traders if they ei­ther buy or sell goods on six or more days in a year or sell sec­ond­hand goods worth more than $2000.

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