Government changes tack on online shopping GST to avoid price hikes

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#2140415 6-Dec-2018 10:21

GST law tabled at Parliament.

The law introducing an "Amazon" tax on overseas internet shopping has been introduced to Parliament, but tax experts warned foreign firms might find it challenging to meet the Government's deadline.

From October next year, people will be supposed to pay GST on most items they buy direct from overseas, with GST on items costing less than $1000 charged by foreign firms at the point of purchase.

The law – which National has indicated it is almost certain to support – will change the current situation under which items costing less than $400 can usually be bought from overseas websites free of GST.

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#2141914 9-Dec-2018 10:44

Memo to self: I had better accelerate some purchases I had been planning to make before this comes it.

The devil will, of course, be in the detail. NZ is a minnow without much clout. It will be interesting to see how they deal with vendors who simply refuse to comply, and Chinese vendors who routinely massively under-declare the value of packages without being asked to do so. Plus, I am somewhat concerned about vendors I use simply deciding that it isn't worth the trouble of complying, and stopping shipping to NZ altogether.

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#2141922 9-Dec-2018 11:21

Remember that imports from $400 to $1000 might actually get cheaper.

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#2141971 9-Dec-2018 12:00

freitasm: Remember that imports from $400 to $1000 might actually get cheaper.

I am not sure giants like Amazon give a toss about NZ.

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#2142015 9-Dec-2018 14:00

well they do sort of care about Australia since they have their own store there

But it only applies to goods Amazon stocks and supplies itself directly. Not Amazon market where there are tons of choices.

One option for them is not to ship anything here at all. As another person noted - the volume of business lost would be miniscule.

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#2142022 9-Dec-2018 14:10

You folks assume this is a big thing for Amazon. But they have their systems already working and collecting GST for ages.

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#2142024 9-Dec-2018 14:14

I wonder what will be next for local retailers once this passes. They seem to manage to avoid any real scrutiny about why our prices here are so much higher for the limited selections they offer, but also actively lobbied for everyone else to pay more anyway.

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#2165199 22-Jan-2019 10:21

will customs be more flexible on the $400 threshold until law says the threshold is $1000, I am considering a purchase for $440.. and would suck if I had to pay fee, don't mind paying GST..

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#2165220 22-Jan-2019 10:57

Don't count on it.

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#2165236 22-Jan-2019 11:15

I thought the threshold was dropping not increasing to $1000, as in GST payable on goods under $400 from October.

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#2165327 22-Jan-2019 12:55

TENKAN: I thought the threshold was dropping not increasing to $1000, as in GST payable on goods under $400 from October.

From memory customs duty and all the other charges that apply won’t be there under $1000, it will just be the GST.

Items under $400 will be more expensive by the GST where it is charged.

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#2165512 22-Jan-2019 15:30

GV27:

I wonder what will be next for local retailers once this passes. They seem to manage to avoid any real scrutiny about why our prices here are so much higher for the limited selections they offer, but also actively lobbied for everyone else to pay more anyway.

Not really. They collect GST, why shouldn't their overseas competitors?

There is competition here for retailers, you can buy from one here, or another here, or offshore.

NZ is VERY small, you will never see an aisle of toothpaste as you will see in a city twice the population of our entire country. Its not the retailers fault the choices are less, its our small size, but we also have other lifestyle benefits

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#2166322 23-Jan-2019 14:47

tdgeek:

GV27:

I wonder what will be next for local retailers once this passes. They seem to manage to avoid any real scrutiny about why our prices here are so much higher for the limited selections they offer, but also actively lobbied for everyone else to pay more anyway.

Not really. They collect GST, why shouldn't their overseas competitors?

There is competition here for retailers, you can buy from one here, or another here, or offshore.

NZ is VERY small, you will never see an aisle of toothpaste as you will see in a city twice the population of our entire country. Its not the retailers fault the choices are less, its our small size, but we also have other lifestyle benefits

Given the internet, it's relatively easy to compare what you pay for similar big ticket items in Australia vs. here. Even within the same chains, e.g. Harvey Norman, JB - there are significant differences. It's not our small size that's the problem, it's that we are a captive market.

For more unusual items, I am still not sure why I should have to pay extra for an item that no one stocks or sells in NZ, and that I have to take the risk importing myself. Yet the retail lobby somehow seems to think they miss out every time someone spends money on an international transaction.

Also, don't forget that I am buying in 1 unit lots. Yes, I don't have overheads to price in but if I'm able to buy retail from somewhere else cheaper than a company here can obtain on trade terms... well maybe that's not something individual shoppers on our notoriously low wages should be pinged for.

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#2166392 23-Jan-2019 16:56

GV27:

tdgeek:

GV27:

I wonder what will be next for local retailers once this passes. They seem to manage to avoid any real scrutiny about why our prices here are so much higher for the limited selections they offer, but also actively lobbied for everyone else to pay more anyway.

Not really. They collect GST, why shouldn't their overseas competitors?

There is competition here for retailers, you can buy from one here, or another here, or offshore.

NZ is VERY small, you will never see an aisle of toothpaste as you will see in a city twice the population of our entire country. Its not the retailers fault the choices are less, its our small size, but we also have other lifestyle benefits

Given the internet, it's relatively easy to compare what you pay for similar big ticket items in Australia vs. here. Even within the same chains, e.g. Harvey Norman, JB - there are significant differences. It's not our small size that's the problem, it's that we are a captive market.

For more unusual items, I am still not sure why I should have to pay extra for an item that no one stocks or sells in NZ, and that I have to take the risk importing myself. Yet the retail lobby somehow seems to think they miss out every time someone spends money on an international transaction.

Also, don't forget that I am buying in 1 unit lots. Yes, I don't have overheads to price in but if I'm able to buy retail from somewhere else cheaper than a company here can obtain on trade terms... well maybe that's not something individual shoppers on our notoriously low wages should be pinged for.

NZ is small. The overheads per sale have to be much higher. Bulk buying power is weaker, that's a double edged sword.

I don't feel retailers have made this happen, they will get some benefit, but we often read that this is a retailers dream. For me, its not about that, they are just lucky to receive this possible benefit to their sales. The issue is GST. GST revenue will drop as overseas purchases increase. So, a Govt has to ensure that revenue isn't lost, or increase GST on everything else every year to counteract it.

The issue of I can't buy this model here etc doesn't really matter. The benefit to you is buy it offshore. But don't cost our Govt GST revenue. GST is a consumption tax so it needs to be levied on consumed goods. The source is not relevant, as imports have GST on the price tag, so private imports should not be different.

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#2166446 23-Jan-2019 18:48

Adding to the above, NZ retailers are also subject to the CGA and FTA which add considerable costs. While I would like to make a point that I am not defending the overall position NZ retailers have taken, they do have a point that their cost structure is higher than those overseas. I expect retailers will move onto the next injustice and seek immediate legislative changes to level the playing field.

On the other point, technically GST revenue is not lost by the Government if a consumer purchases an item from a foreign supplier under the existing system, when that item is not available locally in NZ. But I think the overall point you’re making is definitely valid.

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