Minister jumps gun on Amazon tax

Revenue Minister Stuart Nash has admitted he jumped the gun on Wednesday when he said the Government would introduce a so-called Amazon tax on internet shopping.

He said it remained correct that the Government had not ruled out levying GST on low-value purchases from overseas within its current term.

But he said the matter would be looked at by the proposed Tax Working Group, which will be established with the goal of considering substantial tax changes that could take effect after the next election.

Nash told Newstalk ZB on Wednesday that he would ‘‘absolutely’’ make the tax change, which would mean people had to pay GST on purchases from overseas websites that fell under the current thresholds of between $225 and $400.

However, he was later contradicted by Finance Minister Grant Robertson who said that was still being investigated.

Nash said Robertson’s comments were the correct steer.

‘‘I guess I did jump the gun a bit. We have got a Tax Working Group that we are putting together and they will be asked to consider these thorny issues.

‘‘It is easy to have policies in isolation, but if you don’t look at the whole tax system, then you run the risk of things getting out of whack.’’

Nash said that was why it was vitally important that the Tax Working Group, which Robertson would lead, was given a mandate to ‘‘have a look at the challenges facing our system in the 21st century’’.

Asked whether that meant an Amazon tax could not come in before the next election, Nash said he didn’t want to preempt any decisions. ‘‘What the Prime Minister did say is that there will be no substantive changes to the tax system until after the next election.’’

Retail NZ had described what appeared to be the confirmation of an Amazon tax as ‘‘outstanding news’’.

‘‘Our view is it has to happen urgently and we will be continuing to send that message to the Government,’’ policy manager Greg Harford said.

‘‘Retail NZ is asking Minister Nash to stand by his commitment to ‘absolutely’ fix this problem, even though we understand that there is some detail to work through, and that a timeline needs to be established.

Retail NZ wanted New Zealand to move at the same time as Australia to introduce an Amazon tax.

From July, the Australian Government will oblige overseas companies and online marketplaces to levy GST on all ‘‘low-value’’ products they ship to Australians. The rule will apply to foreign businesses that sell more than A$75,000 (NZ$82,000) worth of goods to Australians each year.

PwC tax expert Eugen Trombitas said there was nothing unique about Australia’s situation that would prevent New Zealand copying its approach.

But he said it might be worth waiting to see how Australia fared implementing the tax change, given it would likely be a world first.