NZ Retailers: Importers Must Pay GST on Low-Value Goods

3-minute read (4-minute listen)

Brian Gaynor Radio NZ host:  New Zealand retailers say they will challenge the new government to pick up a plan the previous one left dangling, to collect GST  on lower value imported goods.

Retail New Zealand says the government is doing itself out of an estimated $235 million a year in GST revenue when there’s a simple solution. Here’s Tracy Neal.

Full Audio Interview (transcription below):

Tracy Neal from Radio NZ:  Last year the government said overseas companies selling digital products and services online to Kiwis had to register for GST. But that excludes large companies selling small items totalling less than $400. Greg Harford of Retail New Zealand says that’s not right.

Respondent #1:  At the moment the government effectively applies a reverse tariff against the New Zealand firms and allows foreign businesses to do business here without paying their fair share of taxes and fees at the border.

Tracy Neal:  He says small businesses are bearing the burden. The head of Booksellers New Zealand, Lincoln Gould, says large overseas companies like Amazon have been given a competitive advantage over small local businesses.

Respondent #2:  We’re saying that now with the impact of online sales into New Zealand, which is creating a 15% competitive advantage to offshore online retailers, that loophole should be closed.

Tracy Neal:  Mr Gould, who runs Messines Bookshop in Featherston, says booksellers have been campaigning for change for about seven years. He says efforts to close the loophole have been mired in political concern about a consumer backlash.

At the weekly farmer’s market in Nelson, many shoppers approached by RNZ News said they regularly buy goods online. Most supported the idea of GST being added to smaller items once they knew how much extra tax revenue it could generate.

Respondent #3:  I would say yes because I hate to see the impact that online shopping is having on local businesses.

Respondent #4:  Yeah. Yeah. Otherwise, it’s not a level playing field.

Respondent #5:  Hell, no. They can get it somewhere else. If I’m buying a pair of shoes online for $100, how much tax is it going to make on that? All right. Not very much.

Respondent #6:  Yes, I would. It’s going to be a bit of a stranglehold with Amazon, so I think I’d support the government collecting the tax.

Respondent #7:  Yes, of course. Yeah. Some of it should be passed on to the consumer, yeah.

Tracy Neal:  Jo Dippie owns independent bookstore, Page & Blackmore, in Nelson and says not only is she losing out to online shoppers she’s also become a shop window for them.

Respondent #8:  We get customers come in with their cellphone, they stroll around, they look at all the books, they take photos, and then they depart. And you know that they’re going to go and order off Amazon or whoever.

Tracy Neal:  Mr Gould says the lobbying has been as recent as July when he wrote to the Minister of Revenue and was told in a statement that Inland Revenue, Treasury and Customs were looking into it. Ideally, GST should be collected on all imported goods.

The growth of e-commerce and goods supplied directly has led to a large increase in the volume of low-value goods.

Greg Harford from Retail New Zealand says a move by the Australian government to require foreign firms to register for Australian GST could create an absurd situation in New Zealand.

Respondent #9:  A New Zealand retailer will have to register and pay Australian GST to the Australian government but selling into that market, but Australian firms can sell into New Zealand without paying GST to the New Zealand government.

So it’s not right. It’s costing New Zealand taxpayer money, and fundamentally it’s unfair for Kiwi businesses.

Tracy Neal:  Mr Harford hopes that a review of the tax loophole will become a priority for the new government. For Morning Report, Tracy Neal.

Source: Radio New Zealand

 

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