Trade Me sees ‘Amazon tax’ upside for site’s members
Trade Me says next year’s ‘‘Amazon tax’’ on overseas internet shopping could be a double-edged sword.
Revenue Minister Stuart Nash said on Thursday that foreign firms would be obliged to levy GST on items worth $1000 or less that they shipped direct to New Zealand consumers, from next October.
Most New Zealand businesses could be expected to benefit.
But Trade Me marketplace head Stuart McLean said Trade Me would have to levy GST on goods sold by foreign traders to Kiwis through its online platform, which accounted for about 3 per cent of all items sold through Trade Me by value.
The company had called in May for a ‘‘rethink’’ on the Government’s approach to collect GST, but Nash indicated Trade Me needed to be included to avoid creating a new loophole for foreign sellers.
‘‘The concern if you didn’t register Trade Me is that overseas suppliers would end up just putting their stuff up on Trade Me. The tax system has to be about fairness and integrity,’’ he said.
McLean said that if the tax reform passed as currently described, it would impact about 5 per cent of its professional sellers and 3 per cent of the ‘‘total value of items sold on Trade Me’’.
But he said imposing GST on overseas internet shopping would have benefits.
‘‘The vast majority of our sellers are New Zealand-based and there’s no doubt they will welcome this move,’’ he said.
‘‘It’s a good thing for buyers, too, because for items under $1000, the price they see is the price they pay and there will be no hold up at Customs. They’ll get their items faster.’’
Foreign sellers might choose to sell through Trade Me as an alternative to setting up their own systems to collect GST, which might have a positive spinoff for the company, he believed.
But McLean said Trade Me was concerned about the future tax treatment of secondhand goods bought from overseas via its marketplace. ‘‘The secondhand goods stuff is tricky. While it’s a tiny part of our business it could create pain for our customers.’’
The rules announced by Nash on Thursday mean the overseas shopping regime will be more generous than first floated in May. Although consumers will still have to pay GST on items valued at less than $400, duty and border security fees that can currently apply to items costing between $225 and $1000 will be abolished.
Consumers are likely to lose out overall in direct terms, with the Government forecasting an extra $112 million in tax revenue by 2020-21. But Nash said they would benefit from the greater simplicity of the new regime.
McLean warned some foreign firms might choose not to sell goods to New Zealanders, to avoid getting caught up in the regime.
‘‘We’ve already seen some big international sellers decide Australia wasn’t worth the effort when they made a similar change. As an even smaller part of the global e-commerce market, there’s a chance overseas sellers will decide New Zealand isn’t worth the time.’’