NZ Post may charge people $20 to receive overseas parcels if the Government slashes the threshold under which items can be bought from foreign websites GST-free.
The new fee of between $15 and $20 per parcel would cover the cost of red tape associated with collecting tax at the border, NZ Post said in a document obtained under the Official Information Act.
People could also expect more delays receiving parcels from overseas, it said.
Customs Minister Nicky Wagner is due to release a consultation document in April that will canvass lowering the $400 threshold under which most overseas internet shopping purchases can be made free of GST and duty.
Retail lobby group Retail NZ has been pushing for the threshold to be slashed or abolished, to put domestic retailers and overseas sellers on a level playing-field paying GST.
But NZ Post said that if the threshold was slashed from $400 to $20 and tax checks continued to take place at the border, then it would need to invest $20 million in a brand new parcel warehouse that would also cost several million dollars a year to operate.
NZ Post said it already incurred costs of $700,000 a year helping facilitate the payment of GST and duties on parcels entering New Zealand.
But if the threshold was slashed it would not be able to absorb the increased costs, it said.
“Based on our preliminary analysis, New Zealand Post’s cost recovery charge is likely to be in the range of $15 to $20 per parcel held at the border for GST collection,” it said.
That meant consumers might expect to pay $65 in administrative charges on low-value items they bought from overseas if an existing $49.25 Customs clearance and biosecurity fee also applied to all items under any new threshold, it said.
Buy $30 of books from overseas and the Government would force you to pay another $65 to receive them. This would be as popular as cold vomit. I hope they see sense.
It is possible there is an economic case for a minor reduction in the de minimis threshold of $400. Maybe at $300 the extra revenue would still exceed the compliance costs. But a reduction to anything like $20 would be economic stupidity and become very hated.