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HomeNEWSNew GST rules missing a vital component, Retail NZ says

New GST rules missing a vital component, Retail NZ says

Revenue Minister Michael Woodhouse says the change to GST is being made just in time for New Zealand’s GST system’s 30th birthday.

“From tomorrow, GST will apply to cross border services – including e-books, music, videos and software purchased from overseas websites,” he says.

“This is the latest evolution of our broad-based tax and is an example of the government working with the private sector to produce sound tax policy which is fair for all.”

However, Retail NZ and Booksellers NZ aren’t fully satisfied with the law changes.

 “The Government is missing out on between $200 and $500 million in GST revenue from low value goods, and effectively applying a reverse tariff to New Zealand websites and stores that makes it more expensive for New Zealanders to shop locally,” Retail NZ general manager of public affairs Greg Harford says.

“The top 20 international shopping websites account for two-thirds of all foreign online sales to New Zealanders.  It would be straightforward for the Government to require these businesses to collect GST on the sale of goods, just like it is doing for services. 

“It may not be a perfect solution, but would be a dramatic step forward from doing nothing.  The Australian Government has announced it will implement this solution from next year, and there is no reason why New Zealand should not be moving on this.”

Booksellers NZ CEO Lincoln Gould says the new rules are absurd in the way they allow foreign shopping sites to get away with not paying GST.

“The big websites already have systems to collect local taxes,” Gould says.

“The nonsense of the new rules is that the Government is telling Amazon, for instance, it needs to collect GST on the sale of an e-book or music download, but that GST shouldn’t be charged on the sale of a physical book or CD.

“Given that the scene has been set with digital services, the continued Government inaction on low value goods is deeply disappointing.  We are calling for urgent Government action to close the tax loophole.”

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