Retail NZ is calling for Revenue Minister Stuart Nash to stand by a statement he made on Wednesday in which he confirmed offshore retailers will be required to pay GST on goods under $400 sold into New Zealand online, but Nash and his Government have since pulled back from that commitment.
In an interview with Newstalk ZB, Nash described tightening up the de minimis loophole as “the right thing to do”. He said it would “absolutely” be closed, but did not give any detail on how this would be achieved.
Finance Minister Grant Robertson later contradicted Nash, telling the NZ Herald that the Government was only looking at this issue and no decisions had been made about it.
In an interview with Fairfax Media, Nash today agreed with Robertson.
"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."
When pressed by Fairfax on when changes might be expected, he deferred to the Prime Minister’s statement that no substantive changes to the tax system would be made until after the next election.
Retail NZ general manager for public affairs Greg Harford reiterated the urgency of the need to make sure foreign websites are paying their share of GST, noting that the Australian Government had implemented GST registration requirements for offshore retailers from July 1 2018.
It's not right that New Zealand businesses are disadvantaged by being domiciled here, and it's not right that the Government is missing out on $5.8 billion in GST revenue over the next 10 years.
"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,” Harford says. “We would be deeply disappointed if the Minister were now to say that the Government is not committed to resolving the problem."
For more background on this issue, see our previous article.