The view on the street
Wellington mum MaryRose Painter, 31, shops regularly online. ‘‘Particularly with an 18-month old I have very little time for wandering up and down the shops.’’
She has been ‘‘pinged’’ by Customs after crossing through the tax and duty threshold, when buying dresses online that cost $300.
‘‘Customs are pretty good about it, they released the goods quickly. But I would have got charged about half of that again in fees to bring it in – it is a bit cheeky.’’
Painter believes making overseas firms levy GST on small purchases while doing away with duties and Customs fees on goods worth less than $1000 would be a good solution to the GST issue, and might even mean she shopped more online.
‘‘What I tend to do now when I am buying stuff is make sure I come in below the threshold.’’
Fellow Wellingtonian Roslyn Marlow, 29, says that five years ago, she would have strongly objected to having to pay GST on small overseas online purchases.
‘‘I would have said ‘that is ridiculous, you can’t do that’.
She would still prefer not to pay it, but has now come around to the idea that it is fair for New Zealand businesses.
‘‘I guess if they got rid of all the other fees it makes it better.’’
Even though it would mean more money going from consumers’ pockets to the taxman overall, Marlow doubted it would make a lot of difference to how she shopped.
‘‘Because buying online is so cheap, even with GST it is probably still going to be cheaper for the majority of things.’’
For Unity Books owner Tilly Lloyd, a ‘‘level-playing field’’ on GST can’t come too soon.
‘‘My questions are the same now as they’ve been for the past two decades. Why should good localists be penalised on GST? Why should Unity’s customers be penalised just because they are buying their books instore or from our New Zealand online store?
Booksellers met with Revenue Minister Stuart Nash late last year, she says. ‘‘My understanding from that is that the Labour Government’s Tax Working Group has the issue on faster track than the preceding government.’’
requirement for all stakeholders to be consulted.
National’s Cabinet paper said its plan would create a more level playing field for New Zealand and foreign firms and ‘‘reflect the modern world of consumer purchases’’.
It ‘‘conservatively’’ estimated its version of an Amazon tax would raise $64 million in its first full year of operation in 2020-21, rising to $81m two years later as internet shopping grew.
That calculation was based on an assumption that three-quarters of foreign firms that came in above the $60,000 annual sales threshold would fall into line and agree to levy the tax for the Government.
Consumers would have paid more in tax overall.
But the change would have meant the Government foregoing $5.2m a year in tariffs on lowvalue goods and $17m a year in Customs and biosecurity fees. In the end, that would have left government coffers about $42m a year better-off.
Both Harford and Trombitas believed much more tax would be raised than the Cabinet paper had forecast. Harford believed the figure would be closer to $200m in extra tax.
Trombitas said he would add at least an extra $100m to the forecasts immediately.
Abolishing duty on low-value imports was probably pragmatic, he said.
‘‘The big plus is, you simplify GST at the border.’’
PwC tax partner
‘‘I would have thought the current Government had nothing to lose by picking up this piece of work and polishing it.’’
Eugen Trombitas