More nonsense re GST on overseas purchases

December 27th, 2013 at 11:00 am by David Farrar

The Herald reports:

Nearly 40 per cent of New Zealanders believe should be charged on all purchases made on foreign shopping websites, a survey has shown. …

A Herald-DigiPoll survey this month found that almost 55 per cent of the 750 New Zealanders polled had bought goods from foreign websites.

Of those surveyed, 53 per cent said the $400 exemption should not be removed as the tax would be too inconvenient to collect.

Surprisingly, just under 40 per cent – 38.5% – agreed with the view of the Retailers Association that the 15 per cent GST should be applied to all overseas online purchases to level the playing field for local retailers.

This is like polling people on whether they would like more sunshine. You can want it, but it doesn’t mean it will happen.

Unless overseas companies decide to volunteer to collect tax for the NZ Government, then the only way you can apply GST to all purchases made on those sites is to have Customs impound every single letter and parcel sent from overseas, open it, assess its value, invoice you for the GST, and refuse to hand it over until you pay the GST. It would cost the Government hundreds of millions of dollars and piss off around two million or more NZers who would find that they no longer get mail from overseas delivered to them.

Labour Party revenue spokesman said the Government “needs to explain to New Zealand businesses why they should be disadvantaged by having GST collected when overseas business don’t face that challenge”.

“It seems it would be pretty simple to speak with Amazon and other suppliers to ask them to collect GST since they collect, as I understand it, sales taxes for individual states in the US. If that’s true, then it’s obviously an ideological decision from the Government not to collect it.”

David Clark is a smart guy, but he sounds like a moron when he speaks such tripe. Amazon is a US company and obliged to collect tax for the US Government from US citizens. It is not a NZ company and the NZ Government has no power to force it to collect GST for us.

To say that Amazon not charging GST to NZ customers is because of an ideological decision of the NZ Government is one of the most patently false and stupid things a NZ politician has said this year.  Perhaps a journalist could ask David Clark if he will guarantee that under a Labour Government, Amazon would collect GST for the NZ Government?

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58 Responses to “More nonsense re GST on overseas purchases”

  1. Fletch (6,517 comments) says:

    I’d be interested to see what kind of a mark-up we kiwis are exposed to by local retailers. It’s not the just the lack of GST that makes Kiwis shop overseas.

    I worked with a guy who used to work at both Briscoes and Dick Smith, and he said both stores had ridiculous mark-ups on the stuff they sold; so much so, that he said he wouldn’t shop there any more. He reckoned those Briscoes specials we see all the time weren’t really that special at all – just bringing the price down to what it should be.

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  2. Pauleastbay (5,035 comments) says:

    More shit from the Herald.

    I buy two or three books a week on my Kindle, People buy music digitally.

    What will they do , force Amazon to set up a site in NZ at their expense so the govt can charge me GST?

    I know , lets set up a new government department, it will only cost 400 million a year to run and they will be able to collect the alleged 300 million

    Or the government can set up its own E reader site. There we go two labour wank policies and its not even the new year

    David Clark is obviously not a smart guy is he or he would STFU , he probably really is a moron and just mislead you all in Wellington

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  3. Pauleastbay (5,035 comments) says:

    just bringing the price down to what it should be.

    no the mark up is still huge on the shit Briscoes sell.

    What the retailers association is not telling anyone is we are a really small country which is well over supplied with retailers who are all trying to make a living , these are meant to be business’s not charities.

    I know government subsidies – thats always a plan

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  4. In Vino Veritas (140 comments) says:

    David Clark cannot be a smart guy. A smart guy would not have made comments like this as a smart guy would have realised the implications of what he was saying. Even if he was seriously pissed.

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  5. Joanne (177 comments) says:

    WTF. Now I would assume David Clark has never ever been an accountant to realise how relatively simple GST was when Roger Douglas set it up.

    How absurd can you get. No much more. Now businesses pay GST on inputs and collect on outputs. To make it fair the Government would have to allow say Amazon to claim GST on the inputs of the outputs supplied to NZ residents.

    Plus NZ businesses who pay/collect GST are in NZ. They are offering a service in NZ. Why should overseas business who don’t reside her be made to collect for the IRD.

    I would assume GST is paid. The NZ delivery company surely collects and pays GST for the delivery service. The pay GST on petrol, rego fees etc.

    And correct if I’m wrong, I haven’t been an accountant for a few years, GST is paid on goods over $400 that are imported.

    It’s irritatingly absurd. It’s a political yawn.

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  6. BeaB (2,164 comments) says:

    How can these MPs spout this kind of tripe and no-one in the media questions it?

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  7. dog_eat_dog (785 comments) says:

    David Clark got free column space so he took it, and no one from the Herald thought to point out how retarded or stupid it was. Nor did it quote any of the hundreds of negative comments on its last propaganda piece for retailers where website readers laid into retailers for massive mark-ups for the same products when compared to overseas, even within the same chains.

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  8. OneTrack (3,348 comments) says:

    pauleastbay – “I know , lets set up a new government department, it will only cost 400 million a year to run and they will be able to collect the alleged 300 million”

    Be careful. That sounds like a win-win in leftyville. Labour are probably already jotting down your idea on the back of a beer coaster for formal announcements this afternoon.

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  9. Zebulon (125 comments) says:

    The real issue is that local retailers need to lift their game so that we actually want to buy from them. Things like: good service, reasonable mark ups and a wide selection. It’s not rocket science.

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  10. wrightingright (145 comments) says:

    Who did this polling, the Retailers Association??

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  11. backster (2,194 comments) says:

    The solution would seem to be to charge GST on all imported items under $400, and charge NZ retailers a levy to cover the cost of setting up and maintaining the Government Department to collect it.

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  12. Joanne (177 comments) says:

    Pauleastbay – I want a Kindle.

    Todd McClay and Sue Chetwin were the only ones making sense in the article.

    Dumb idea.

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  13. flipper (4,327 comments) says:

    Earlier this month I purchased Tom Clancy’s last book, via Amazon. Delivery, using the cheapest economy post option, took 10 days.

    So….a few things here:
    1. The cost of the Clancy book in NZ v Amazon – On sale at Paper Plus at $NZ50.

    2. Cost via Amazon inc ship/post (US16.50 + P & P) = $34.05 NZ.

    3. Take off ship & post…the net NZ cost $21.41. Add GST = $24.62 NZ

    4. Importer/retailer is creaming, No?

    The NZ retailers can get stuffed,. :-)

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  14. Pauleastbay (5,035 comments) says:

    Flipper

    Do books still have Muldoon’s ‘luxury’ tax on them in New Zealand?.

    I don’t recall it ever being revoked, anyone know?

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  15. flipper (4,327 comments) says:

    PEB…
    I don’t know…but I thort all those bits and pieces went when GST came in.

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  16. Pauleastbay (5,035 comments) says:

    Ta

    If you want them even cheaper Book Depository no P & P to NZ.and they rpice in NZD Amazon bought them out but its still cheaper than from the US

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  17. Archer (220 comments) says:

    The dishonesty and deceit by a senior Labour MP is disgusting.

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  18. kevin_mcm (141 comments) says:

    There are two separate issues here and should not be conflated.
    1. The margins of NZ retailers versus overseas retailers
    2. The collection of GST

    On the first, it is clear that NZ retailers charge more on an exclusive of GST basis that off-shore retailers, so merely collecting GST will not change buying habits. As to why, it is irrelevant for this discussion.

    On the second, there is a relatively easy solution for the collection of GST and that is to use the credit card companies to carry out the process. Essentially every credit card transaction involving an off-shore entity would have GST charged by the credit card company and remitted to the government. For GST registered entities, this is not an issue – they merely include as in input tax in their next return. For individuals they would effectively be paying GST to the government via the credit card company. For an individual travelling overseas they would need to claim back GST by showing they were overseas when the purchase was made – easy enough to link passport based records to an on-line claim form.

    The only part I am not sure about is Paypal – since that is typically back-to-back with a credit card the easiest might be to treat paypal as an off-shore supplier.

    Simple..effective..cheap.

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  19. gander (90 comments) says:

    I’d much rather pay GST on all items I import than pay more income tax.

    (right, here come the thumbs-down)

    I suspect various OECD governments will eventually cooperate in such an endeavour. Leakage of VAT/GST revenue to offshore purchasing is not a NZ-specific problem.

    I could see a system of preclearance in which Amazon, for example, could charge NZ GST on any sale being despatched to a NZ address, apply a tag to the parcel and it’d sail through NZ Customs. No such tag? It’d get inspected, valued and invoiced.

    Any process that would delay or interfere with the flow of goods, though, I want no part of. And I’d worry that that’s the plan of the retailers’ groups: make it too difficult to buy offshore. (As for Labour’s plan – “Labour” and “plan” don’t really seem to go together.)

    I think there are legitimate reasons for local prices being somewhat higher. Cost of shipping, size of market, cost of money to maintain inventory, Consumer Guarantees Act. But let’s take away one excuse for the more outrageous markups.

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  20. xy (202 comments) says:

    Speaking as someone who builds ecommerce sites for NZ companies who ship things overseas, be careful what you wish for – it’s much easier for Amazon to handle GST than it is for us to handle US sales taxes…

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  21. flipper (4,327 comments) says:

    kevin_mcm (151 comments) says:

    December 27th, 2013 at 12:33
    ****

    Garbage.

    This silly bloody retailer promoted GST idea was tried by Aussie retailers some 18 months ago – and rubbished by their media. The only question is why our media don’t do a similar analysis.

    As for the credit card companies……. bullshit. It will not, for a raft of technical reasons, ever happen.

    The use of EFTPOS ( or debit cards) is already established world wide. And that does not even deal with the issue of tax.

    And tell me why AMERICAN Express, or VISA or Master Card, or Diners, et al, mostly all New York based, but operating world wide, will agree to your silly idea. The last time I looked NZ had a population of about 4,510,000. The US is approaching 400 million.

    Those card companies will, as I do, tell you to bugger off……so ….

    Bugger off :-)

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  22. Pauleastbay (5,035 comments) says:

    Like I said

    I spend about US$20 per week on Kindle books. Its just not worth the governments time and effort to get the NZ$3.45 .

    Its seriously not, $300 million sounds a lot but its not, firstly it a number estimated by the retailers association so it will be on the high side, secondly before all the hyperbole lets see numbers regarding what it will cost to collect, this will be huge.
    Thirdly, Amazon is not the only retailer there are thousands that deals would have to be made with.

    Fourthly the Credit card companies will not collect tax for free, rates go up they lose customers or they offer customers US based Credit cards or US retailers let me set up an account ( which I can do anyway)so technically I purchase in the US and it just posted here.

    Does anyone here honestly think that if it was worth it or easy a government wouldn’t have done it FFS

    When there is a balanced article with some provable numbers get back to us

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  23. flipper (4,327 comments) says:

    PEB….

    Yep……

    And if a credit card is used for a purchase…where/how was the transaction conducted/concluded?
    Was it while I was in the US.. or Australia….or by internet.. or by telephone?????

    That would take us back to the days of the bloody silly customs/ST duty arguments for all returning travellers.

    It will NEVER happen – not even if silly bloody Clark and wussell red melon get the treasury benches.

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  24. Archer (220 comments) says:

    As kevin_mcm has explained, any measure needs to be at the payment level (credit card company, maybe Paypal).

    There are only 2 other ways – neither of which are in any way workable.
    1 – Merchants
    There is no way that merchants could do it. Amazon is a drop in the bucket of online merchants. Every international seller on Ebay would need to be contacted, every business worldwide that provides international shipping. It is completely unworkable. For instance, I order my companies work uniforms from a clothes retailer in Australia – how long before Customs/IRD get round to contacting them? Anyone that suggests merchants do it are saying the NZ government should contact millions and millions of companies worldwide. It is an incredibly stupid idea. And of course there is nothing that says a company that sells online from Russia has to comply with an NZ government request. It is a silly idea and David Clark has the intelligence of a stapler for thinking we should do it.

    2 – Customs/At our border
    Presumably why the level is set at $400, it would cost more money to collect GST on small packages than it would provide in revenue. Not logical at all, it just increases the burden on the NZ taxpayer while providing a negative return (quite fitting for Labour to want it).

    The only other option is to tackle it at the payment level (if we were to do it at all, which I don’t think is necessarily a good idea), since there are only a handful of credit card companies (and paypal). People could do direct payment via bank accounts but Credit Cards would capture 99% of your target. There will always be loop holes, like with any tax system.

    Of course, as has been covered in the comments, GST is only part of the reason goods are cheaper online.

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  25. Nigel Kearney (1,094 comments) says:

    Does David Clark expect every online retailer in the world to collect GST for the NZ government, or does he just expect Amazon to voluntarily add 15% to their prices when their competitors don’t?

    An effective 15% penalty on local sellers is very harsh though. They are right to be upset at not having a level playing field and lobby to have this fixed.

    The idea of just making the banks add 15% to every offshore transaction is not obviously silly, though it might be difficult to implement and turn out not to be worthwhile. I would even consider a possible solution of taking GST off small, non-perishable items.

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  26. kevin_mcm (141 comments) says:

    Flipper

    The credit card companies will do because it is in their financial interest to do so – the other option is that they walk away from the profit they make in NZ.

    You seem to be quite emotional about it – I was merely presenting a practical solution to David’s assertion that the cost of collection would be too high. Given transactions are all electronic and the credit card company knows that the other party is a non-NZ entity the process of adding GST to the customer’s credit card is just one more electronic transaction. The only cost is one of programming, and since NZ has a very simple set up this would not be great.

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  27. dave_c_ (225 comments) says:

    The fact collection of a tax is even being considered by government, just goes to show that they have absolutely no interest in making the lifes of ordinary citizens any better or more comfortable – Self interest, and the pandering to business interests, are all that count to these political animals ! If it aint already taxed, tax it, tax it and tax it again!

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  28. infused (583 comments) says:

    The problem is this.

    Retailers in NZ still haven’t got the fact they are now competing on a global scale. I run an IT business proving cloud solutions. I am up against cloud providers worldwide, not in NZ.

    The price is too high. It’s as simple as that. My DC shoes in NZ are $220. Get fucked if I am paying that. I can land the same pair for $100 NZD.

    It’s the same with everything. Until retailers realize they are competing globally, they will continue to fail.

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  29. wf (480 comments) says:

    I buy online from where-ever, although if I can get what I want easily in NZ, loyalty usually wins. However: I wanted a new ‘dog door’. From the largest pet equipment store in Wellington -$119.00 over the counter. The business does not do telephone orders, does not allow internet banking, and does not currier anything anywhere.

    Amazon: order and pay online, next day despatch, here in 8 days. NZ $92.85.

    ‘Nuf said.

    The only thing is that some US retailers quote the most expensive postage – a bulky envelope was going to cost me nearly US $50 on a $19.95 item so I flagged it.

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  30. flipper (4,327 comments) says:

    kevin_mcm (152 comments) says:

    December 27th, 2013 at 1:40 pm

    Flipper
    ****

    1. I’m not emotional about this. I am realistic.
    2. It will not, EVER, be in the interests of credit card companies or banks to do what you suggest.
    3. Go study foreign exchange rules.
    4. I use both Debit and Credit cards .. and use both in NZ and abroad.
    5. The moment any bank starts to load my DEBIT card it will be good bye to them
    6. As I said above… your “solution” would be impossible for a nation of 4.5million.
    7. Your proposals are superficially attractive to the great unwashed..
    BUT
    8. Please explain WHY you would take us back to a time when every traveller returning to NZ went through a customs dance that cost zillions to administer and produced peanuts.
    9. That regime was upheld only by the holders of import licences, manufacturers, distributors, and retailers.
    10. The $400 threshold is probably viable , but only if most transactions exceed that sum by a substantial amount.
    11. Take a look at unintended consequences for a nation relying on tourism…for example.

    IT WILL NEVER HAPPEN

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  31. Tautaioleua (324 comments) says:

    This reminds me of the recent taxi protest outside the Auckland airport. We have more taxis per capita than anywhere else in the world, and it wouldn’t surprise me if we paid more for em too (taxis are dirt cheap almost everywhere else – a few dollars more than the local bus for the same route).

    I suspect that New Zealand is overburdened with competition given our relative size and spread. The retail industry should be pealed right back, the taxi industry too.

    It’s embarrassing when you have to explain to friends/relatives visiting why NZ is so bloody expensive.

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  32. RichardX (330 comments) says:

    Pauleastbay (4,827 comments) says:
    December 27th, 2013 at 12:48 pm

    I spend about US$20 per week on Kindle books

    PEB, do you feel you are getting value on Ebooks compared to physical items
    I believe the profit margin for publishers on Ebooks is way more than if they were selling physical units
    There is no cost of distribution, production, returned or remaindered stock but you still pay USD10+ for a recent release book
    I am sure the authors cut has not increased

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  33. Pauleastbay (5,035 comments) says:

    RichardX

    Yes I do.
    E Books for me.
    1. They are cheap. Example “One Summer, America, 1927 ” Bill Bryson – Ebook USD$13.57 -Whitcoulls NZD$51.00
    2. I have thousands of “real books” space has become an issue, what I do now is read the e book, if its a keeper, I’ll buy the hard copy later usually second hand
    3. There are lots of books available in e format that are not physically available.
    4. Authors and recording artists have been bent over for centuries by publishers, nothing has changed, obviously the author makes a quid . If I couldn’t buy the Bryson book E style at that price , I wouldn’t buy it until available second hand and the author would get nothing out of that.

    So, I pay $10 plus US, I still get the same amount of pleasure time wise, the only thing missing is I don’t get to look at it on my book shelf, wish for me is a lose , but presently space dictates

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  34. flipper (4,327 comments) says:

    One final point on Amazon v Retail.

    The problem exists in the US where the RETAIL price of Clancy’s Command Authority is $US29.95 plus local tax.
    Amazon sells at US16.50…but others are cheaper – ergo about 55-60% of local retail.

    And for those who have an interest in tax matters :

    Laws and Taxation of Internet Sales: Constitutional Analysis by Erika K. Lunder and John R. Luckey (Jul 26, 2012)
    $0.99 Kindle Edition
    Auto-delivered wirelessly (Amazon price/ref)

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  35. wat dabney (3,840 comments) says:

    I suspect that New Zealand is overburdened with competition given our relative size and spread. The retail industry should be pealed right back, the taxi industry too.

    Wait. You’re blaming high prices on too much competition?

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  36. scrubone (3,097 comments) says:

    And apparently, because there are more IRD privacy breaches, soon there will be no privacy at all!

    And while the total number of people affected in the breaches has dropped from 6379 to 1158, hundreds more people are victims of serious breaches.

    In 2012, 638 people were caught up in three serious breaches while in 2013, 946 people were affected by 43 serious breaches where Inland Revenue has had to put security measures in place to protect people from identity theft.

    Labour’s revenue spokesperson David Clark said it’s a huge increase.

    “At this rate of increase pretty soon every New Zealander’s private banking data will be available to anyone that wants it and that’s a frightening prospect,” he said.

    Hard to take someone who says stuff like that seriously.

    But it all seems to be straight out of the Cunliffe playbook – make an extreme statement that sounds really bad, so long as someone who doesn’t think much won’t realise it’s nonsense then to heck with it’s attachment to reality.

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  37. scrubone (3,097 comments) says:

    Wait. You’re blaming high prices on too much competition?

    Too many *competitors*. You can still have just as much competition with fewer competitors, and they’ll get better economies of scale.

    At least, that’s the point I assume he’s trying to make.

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  38. OneTrack (3,348 comments) says:

    “make an extreme statement that sounds really bad, so long as someone who doesn’t think much won’t realise it’s nonsense then to heck with it’s attachment to reality.”

    By “someone” you mean your average MSM journolist who parrots anything a left-wing politician tells them?

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  39. Tautaioleua (324 comments) says:

    wat dabney,

    I am of the view that there are too many players in the retail industry and too few consumers to make each business worthwhile. This bumps up the prices and the consumer loses out altogether.

    Competition is great, but too much of it has the opposite effect (especially in a country the size of NZ). When was the last time you struggled with parking outside the local Harvey Norman?

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  40. Tautaioleua (324 comments) says:

    And as a side note, there’s a reason why things are often cheaper outside of Auckland (the retail capital of the country). If competition was ALWAYS a good thing, Auckland would be the cheapest by far.

    I have family in the Bay of Plenty who complain about food, retail, and just about every other price in Auckland. In some cases, it’s something like a 30% difference too.

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  41. Johnboy (17,015 comments) says:

    I always have to wonder about the rationality of folk that cry out for their government to tax them more.

    Silent T’s scream for C.G.T. is something that should make most sensible folk cross them off the list off chaps to vote for! :)

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  42. RichardX (330 comments) says:

    Tautaioleua (185 comments) says:
    December 27th, 2013 at 4:08 pm
    And as a side note, there’s a reason why things are often cheaper outside of Auckland (the retail capital of the country). If competition was ALWAYS a good thing, Auckland would be the cheapest by far.

    Simplistic view that ignores supply & demand when it comes to overheads for retailers
    I do not know how retailers survive when you look at how much space costs in a mall
    They pay for the foot traffic that the mall provides but this does not make it viable for all retailers
    This also contributes to the sameness of all malls in NZ as it is mainly the big players who can afford it

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  43. Harriet (5,199 comments) says:

    “……To say that Amazon not charging GST to NZ customers is because of an ideological decision of the NZ Government is one of the most patently false and stupid things a NZ politician has said this year. Perhaps a journalist could ask David Clark if he will guarantee that under a Labour Government, Amazon would collect GST for the NZ Government?…”

    LOL DPF. You’re so wrong on this.

    It’s always been an idealogical decision of the NZ government not to pay businesses to do the work of government. So of course Amazon is not going to collect it.

    Amazon should be paid to collect GST, NZ businesses too. It’s just business.

    Kiwis willingly work for the tax office if paid to do so. It’s just work.

    Why do you defend the current idealogical position of slavery as being best practise ? Americans are taught by their government to at least despise slavery. :cool:

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  44. igm (1,413 comments) says:

    Clark elucidates the fiscal inability of the Labour Party, and he is a financial spokesman. If he has ever been in business he will have suffered a similar fate to that of Parker . . . bankruptcy. These socialist fools are a disaster in the making, and God help this country if the losers ever get near Treasury benches, that going for the poor buggers who are now in employment, as they will suffer also.

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  45. wreck1080 (3,999 comments) says:

    “Unless overseas companies decide to volunteer to collect tax for the NZ Government, then the only way you can apply GST to all purchases made on those sites is to have Customs impound every single letter and parcel sent from overseas, open it, assess its value, invoice you for the GST, and refuse to hand it over until you pay the GST.”

    You normally strike me as intelligent but here you are not.

    Some european countries collect GST via the postoffices. ie, you collect your goods from the post office and pay the gst.

    Seems rather efficient to me.

    Not the nightmare scenario you paint as the only option.

    There is certainly no need to open every parcel and assess its value, since the goods values are declared anyway.

    Less hysteria and more balance on the actual options please.

    Although, i disagree too.

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  46. Gulag1917 (1,083 comments) says:

    Australians pay 10% GST on purchases $1,000 and above bought online. Customs impounds the item until the GST is paid.

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  47. Johnboy (17,015 comments) says:

    But Australians are all descended from convicts Gulag1917. I’d impound anything of theirs till they paid for it also! :)

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  48. nickb (3,696 comments) says:

    It’s arguing over rats and mice anyway, given National won’t close the actual gaping hole in our tax base… I’ll give readers a clue as to what it is…it will affect the average property owning MP far more than GST on their online sales.

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  49. peterwn (3,332 comments) says:

    Do not know why David Clark is currently the retailers’ hero. Retailers should consider the future:
    1. Price control on toilet paper perhaps.
    2. Regulation imposed on Countdown and Foodstuffs.
    3. Free range eggs and organic vegetables to be sold at same price as ordinary produce.
    4. Regulation imposed on Warehouse, Farmers, Whitcoulls and Paper Plus.
    5. Regulation imposed on Kirks.

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  50. Harriet (5,199 comments) says:

    “….Some european countries collect GST via the postoffices. ie, you collect your goods from the post office and pay the gst.

    Seems rather efficient to me…”

    Yes it is……and it follows on from my post above.

    Kiwipost operates in the market place, and if they can bid to collect government tax, then so too can others in the market place – like Amazon.

    Or in other words:

    “…Amazon don’t bother to collect NZ government taxes because they are not paid to do so….Why then should NZ post then be treated differently in ‘the market place’….why should they get paid to do a government job and not others ?

    All businesses should be paid to do the work of government – if they do it. It is just a cost to government of ‘doing business in the market place’.

    The current system is one of slavery; Business does the job of government – for nothing.

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  51. SPC (5,664 comments) says:

    The irony, that a consumption tax was introduced to reduce tax on income (lower rate of income tax) to reduce income tax avoidance (diminish the black market economy) and encourage saving.

    As more consumption occurs on-line (in a worldwide market), this spending like mortgage payments is free of GST. Thus consumption on-line escalates as does demand for offshore finance to purchase housing.

    And as for raising the OCR to improve the incentive to save and diminish the demand for offshore finance – this will harm the productive sector – lower returns for exports and higher business borrowing cost.

    A CGT is only a first step to correct this major imbalance in our policy settings.

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  52. freethinker (677 comments) says:

    The current saturation advertising by big b ox retailers and the buying spree by Joe Public show just how easily he is led – lets take a Briscoes/Harvey Norman/Michael Hill type discount of say 50% on a “normal retail price of $200 – ignore the gst aspect for arithmetical simplicity – price is now $100. All these retailers are showing healthy if not increasing net profits so the article is still profitable at a mark up of at least 100%, probably 150% – this is why offshore online purchases are so attractive and the examples of books is so easy to demonstrate. Admittedly NZ retailers bear higher costs due to small market size and distance from supply chain but will either adapt and innovate or wither as the Gst content is not the cure and the law of unintended consequences in the form of lower purchases overseas and reduced freight revenue etc plus others unforeseeable changes in buyers habits may deliver something far nastier for retailers & government by imposing Gst than meeting the challenge and possibly producing something that will be a world leading solution sold by NZ at a profit to the wolrd.

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  53. Scott1 (588 comments) says:

    Classic opposition politics

    1) Make up a position opposite to the government that you think might have some public support
    2) ignore the fact it is ignorant nonsense
    3) make a press release on it

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  54. Scott1 (588 comments) says:

    freethinker,
    the most interesting thing in your example is that it would be something like this –
    units sold at regular retail of $200 = 1
    units sold at $100 = 1000

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  55. SPC (5,664 comments) says:

    This is one reason why consumption taxes will be replaced by financial transaction taxes.

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  56. dc (125 comments) says:

    Amazon is a US company and obliged to collect tax for the US Government from US citizens. It is not a NZ company and the NZ Government has no power to force it to collect GST for us.

    Amazon already collects GST+ import fees for NZ orders if the total order is over the NZ GST+duty threshold. Try it sometime, you will see an “import tax” figure or somesuch in your shopping cart. Their shipper remits it to Customs on the buyer’s behalf on the way through. It would be trivially easy for them to lower the threshold.

    Of course there are many other overseas shippers besides Amazon who wouldn’t be able/inclined to do this. Lance Wiggs had quite a good modest proposal to move compliance and fees for imports from customs to where it belongs, with the IRD and the tax return.

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  57. trout (953 comments) says:

    My last purchase from Amazon included NZ GST as described above. As it happens it was 2 orders totalling more than $400 so I broke the order in two to avoid the duty. By charging GST I guess Amazon can hurry up delivery. So those that think Amazon cannot do it or has other motives please do your research before mouthing off.

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  58. Flyingkiwi9 (55 comments) says:

    Totally against the tax but, don’t most websites that export to the U.K. charge V.A.T.

    The system exists – its just whether NZ is a big enough deal for the smaller websites to care about. Which we aren’t. So we’ll be at the mercy of the likes of Amazon and won’t be able to effectively use other fantastic websites. (Often these are the reason why you went to the internet in the first place – because it wasn’t even available in NZ)

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