Government expected to move on 'Netflix tax'

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ajobbins

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#1645241 4-Oct-2016 14:09

NonprayingMantis:

In this case, $14.99 less GST is actually $13.03. The price before GST came in was $12.99 So netflix are getting an extra 4c out of every subscription on the basis of a lie. (may not sound like much, but add that up over a large number of subscribers).

Geez, 4c? How often have you lost 4c (or 5c) due to cash rounding? Their prices all end in .99, so it will be more about keeping that structure and less about squeezing a measly 4c out of you. Plus, they can put their prices up any time they like.

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NonprayingMantis

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#1645246 4-Oct-2016 14:23

ajobbins:

NonprayingMantis:

In this case, $14.99 less GST is actually $13.03. The price before GST came in was $12.99 So netflix are getting an extra 4c out of every subscription on the basis of a lie. (may not sound like much, but add that up over a large number of subscribers).

Geez, 4c? How often have you lost 4c (or 5c) due to cash rounding? Their prices all end in .99, so it will be more about keeping that structure and less about squeezing a measly 4c out of you. Plus, they can put their prices up any time they like.

hence why the last part of my post said this

" It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it."

Maybe you replied without actually reading that part?

SirHumphreyAppleby

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#1645250 4-Oct-2016 14:32

NonprayingMantis:

hence why the last part of my post said this

" It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it."

Maybe you replied without actually reading that part?

Not disagreeing with you about this, but there are bigger fights to fight. I've actually checked my billing details, and the service period ends 1/11, with the next billing date 3/11, the same day the price rise takes effect. Technically I should only be charged $12.99 because Netflix didn't give 30 days notice as their T&C state, and even without that, the price adjustment and billing date occurs two days in to what would be the next service period, so there should also be an adjustment for that.

I'm not worried about it. I've cancelled my subscription instead. In all honesty, I didn't feel I was getting value from it at $12.99, so I see no sense paying $14.99. In three months I'll have paid for the Peep Show box set... that's about all I've been watching anyway (at least since I finished Narcos season 2).

Hammerer

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#1645255 4-Oct-2016 14:47

I don't see any lie. Technically and substantially the reason for the price increase is due to the GST. I expect that it is the only reason for the price increase. If GST was not imposed then the price would almost certainly have remained the same.

Normally I'd expect users to applaud a month or so delay in applying the new GST inclusive price. Instead people are moaning.

I think it is unreasonable for users to expect Netflix to provide an itemised list to explain every cent of the price increase. That is way to pedantic even for me.

ajobbins

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#1645257 4-Oct-2016 14:52

NonprayingMantis:

" It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it."

Maybe you replied without actually reading that part?

No, I read it. But I think you're looking for something sinister here where it doesn't exist. The Netflix team aren't sitting around in a dimly lit boardroom drinking expensive scotch laughing over how they got one over the Kiwis by sneaking in an extra 4c when the GST came into effect.

This will simply be them rounding to keep with their x.99 pricing that they do everywhere. It warrants no explanation from them. In reality, they probably make and lose more then 4c per subscription at different times as forex rates change, as while they bill you in NZD, they will be taking it back in USD.

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NonprayingMantis

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#1645261 4-Oct-2016 15:01

Hammerer:

I don't see any lie. Technically and substantially the reason for the price increase is due to the GST. I expect that it is the only reason for the price increase. If GST was not imposed then the price would almost certainly have remained the same.

Normally I'd expect users to applaud a month or so delay in applying the new GST inclusive price. Instead people are moaning.

I think it is unreasonable for users to expect Netflix to provide an itemised list to explain every cent of the price increase. That is way to pedantic even for me.

nobody said they do. What they are not allowed to do is claim that the new price is down to GST unless that is true. (even when the difference is only a few cents)

here's warning from comcom when GST changed from 12.5% to 15% back in 2016

http://www.comcom.govt.nz/fair-trading/fair-trading-media-releases/detail/2010/reasons-for-price-increases-must-not-be-misrepresented

"Businesses are not required by law to give reasons when they raise prices. However, when a business does try to justify a price increase to its customers, the reasons they give must be accurate and not misleading. For example, businesses will run the risk of breaching the Fair Trading Act if they explain price increases as being caused by the increase in GST, where the price rise exceeds the extra GST," said Commerce Commission Enforcement Manager, Wellington, Greg Allan.

"Even if a business does not explicitly state that they have put prices up because of the rise in GST, they must take care not to create the misleading impression that GST is the sole reason for the price increase if the increase is more than the extra GST," he said.

whether 4c is a big enough threshold is debatable, but I remember telcos getting in trouble over similar amounts when the price of, say, a toll call was increased by 1-2c more than the GST change alone would explain.

NonprayingMantis

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#1645262 4-Oct-2016 15:03

ajobbins:

NonprayingMantis:

" It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it."

Maybe you replied without actually reading that part?

No, I read it. But I think you're looking for something sinister here where it doesn't exist. The Netflix team aren't sitting around in a dimly lit boardroom drinking expensive scotch laughing over how they got one over the Kiwis by sneaking in an extra 4c when the GST came into effect.

This will simply be them rounding to keep with their x.99 pricing that they do everywhere. It warrants no explanation from them. In reality, they probably make and lose more then 4c per subscription at different times as forex rates change, as while they bill you in NZD, they will be taking it back in USD.

they just needed to make the letter clearer and it would have been fine.

e.g. "The introduction of GST to online services means we will need to change our prices. Our new price reflects several different business factors, of which GST is one. Your new price will be $14.99/month"

would have been totally fine.

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JimmyH

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#1645482 4-Oct-2016 22:09

I think, for a difference of only 4 cents, that is pedantic to the point of silliness.

@Hammerer has it right. Pedantry aside, technically and substantially the price rise is clearly due to GST.

Asmodeus

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#1646273 6-Oct-2016 00:07

PhantomNVD:
Asmodeus:

PhantomNVD: Well I have yet to get the email, though I've had one just today about new movies added, maybe it's cos I started as a USA client and have a US "home" address even though paying via NZ MasterCard now?

I was wondering the same. I used a DNS to sign up to US Netflix using US Youshop address. No email here yet either but I guess it could still be coming

Is yours also a local card?

Yes, NZ ASB credit card. I get charged in USD. No email to date.

nunz

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#1646779 6-Oct-2016 16:51

Geektastic:

Behodar: Presumably if I went to, say, Greece and called a Greek landline with Skype, I'd be charged NZ GST because it's an NZ Skype account. Where's the logic in that?

Arguably, where is the logic in GST at all? Why on earth should you pay a tax because you spent some money (on which you paid tax already) to buy something?

Actually GST is a better option than income tax in some way. its cheaper to administer and it is unavoidable.

If we increased our GST then all goods paid for in NZ by overseas companies would have a tax benefit to us. all services purchased from that company have a tax benefit to us. The company cannot avoid that unless it is a GSt exempt service like bank charges.

Ideally increase GST on everything, drop all company and income tax, get rid of FBT. More money from tourists, lower compliance costs, less government, no loop holes.

Take skype. Lets say MS doesn't buy anything in NZ but it makes 1 millsion dolars from NZ skype sales. We now get an extra $150 000 revenue. Think of all those $1 - $20 being spent on apps, music etc that doesn't benefit any NZer. now it does benefit us. it's not like the prices on essential services or goods (food, power, housing) ahve gone up. It's all discretionary spending.

It also actually makes it better for compaies to come to NZ in one way. Lets say MS did open an Nz branch and purchase internet connections, rental, power, phone etc - worth $500 000 - the GST refund would reduce their liability to the NZ Govt by 75k in the example given above ( GST paid - GST paid out).

It's got to beat Nz dollars leaking overseas without benefit.

Now i have to figure out what that means if i buy services from an over seas contractor. Hmmm.

antoniosk

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#1646792 6-Oct-2016 17:10

ajobbins:

NonprayingMantis:

" It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it."

Maybe you replied without actually reading that part?

No, I read it. But I think you're looking for something sinister here where it doesn't exist. The Netflix team aren't sitting around in a dimly lit boardroom drinking expensive scotch laughing over how they got one over the Kiwis by sneaking in an extra 4c when the GST came into effect.

This will simply be them rounding to keep with their x.99 pricing that they do everywhere. It warrants no explanation from them. In reality, they probably make and lose more then 4c per subscription at different times as forex rates change, as while they bill you in NZD, they will be taking it back in USD.

I take it from a pure marketing position: $14.99 is a nicer number than $14.95, which sounds like a consumer good in a supermarket.

But totes agree on the expensive scotch; margins these days means it's prison hooch made in the toilets.

________

Antoniosk

dazhann

465 posts

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#1647403 7-Oct-2016 17:44

I signed up to netflix when it wasn't available in NZ so I have a USA account. I checked my billing details today as my account has just rolled over to a new month and it says under the subtotal header nzd8.69 (+nzd1.30 tax), then under total header nzd9.99. Needless to say prior to this month there was nothing under the subtotal header and total was nzd9.99, go figure?

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