Australia to enforce online GST tax, but will New Zealand follow suit?

  • News
  • May 13, 2015
  • Elly Strang
Australia to enforce online GST tax, but will New Zealand follow suit?

The Australian Nation Retailers Association (ANRA) CEO Anna McPhee says it’s delighted that the government will tax digital goods, but this is just the beginning.

"Retailers are encouraged by the federal government's first steps, but intangibles are just one aspect and goods also need to be acted on to address tax integrity fully,” McPhee says.

"We must strengthen the integrity of Australia's tax system and ensure similar types of goods and services consumed domestically are taxed in the same way, no matter how that purchase occurs.”

Retail NZ general manager of public affairs Greg Harford echoes this call for tightening up tax laws here in New Zealand.

He says Retail NZ wants GST law changes to go further than just digital goods.

“We want the government to go further and level the playing field for low value goods, as well as for digital files,” Harford says.

“Most countries already have very low thresholds beyond which taxes and duties are levied at the border, and introducing a NZ$25 threshold would bring us broadly into line with countries like the UK and Canada.”

The prime minister has previously said adding GST is “inevitable”, but just how soon it will happen is the issue grating at Kiwi businesses.

New Zealand revenue minister Todd McClay said to Stuff his report on other countries’ taxes had been completed and he expected to make a recommendation to cabinet in the next few months.

He also did not rule out a single trans-Tasman tax registration process, but said it may raise some issues.

Todd McClay.

“Earlier in the year I did have conversations with my counterpart in Australia and we did agree that where there were opportunities to cooperate we would investigate those," McClay said.

Harford says Retail NZ supports any steps taken to simplify trading both here and across the ditch, but says our GST regime is simple and applies universally.

“The Australian GST system is far more complex than ours, and we would not want to see greater complexity introduced to our GST rules as the result of any single registration process,” Harford says.

The campaign for a GST to be placed on overseas companies selling goods online has been dubbed the “Netflix tax”.

This is because the US-based streaming service said it wouldn’t charge its Australian and New Zealand customers GST.

Netflix will soon have to pay tax in Australia as it’s considered a digital import, but New Zealand’s government has not yet taken a definitive stance.

If it does enforce tax, it may lead to Netflix pointing fingers at other online service providers, like overseas retailers, who are operating GST-free here.

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