Kiwis to be hit with tax on online purchases

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Forums › Finance and wealth management › Kiwis to be hit with tax on online purchases

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Rikkitic

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#1907707 25-Nov-2017 16:40

I'm not actually a fan of GST but I thought this thread was about the technical issues of collecting it on small overseas purchases. I was proposing one possible solution.

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MarkH67

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#1907713 25-Nov-2017 17:05

Rikkitic:

But why should it? Collecting GST on small items might not be worth the cost, but it wouldn't cost a lot to maintain a database of imported items over a year, and add up the total for any given address (or recipient name, or whatever). If the end of year total exceeds a certain value, the return would exceed the collection cost and a GST invoice could then be posted out. This cumulative GST approach might require a law change, but I'm sure it could be done.

Well, tracking packages to a given address couldn't work, there is often more than one person living at a given address. In Auckland single people almost always share a house with others as it is almost impossible to cover rent on your own. Then someone moves out of one house and someone else moves in. Sometimes the 4 people living in a house will move out and 4 different people move in. I don't see address tracking as being viable.

So, tracking a person - could that be done? Well, for John Smith you might need to track a person at a given address - where both the name and address are the same you assume it is one person, this could be problematic with a father and son having the same name and living in the same house. OK, let's say we allow someone to write in and explain that there are 2 people living in the same house with the same name and we figure out what to do in those cases, what about in all the other cases? I'd say that yes it could work fairly well for all the honest people that don't deliberately ask the sender to send to their address but with a different name because it is being bought for a 'friend' that lives there. Customs could certainly collect a considerable amount of money from all the people that simply accept being charged GST and do nothing to avoid it.

If they were to completely scrap the stopping of packages worth over $400 and bill me at the end of the year then it would make it MUCH easier to order whatever I want and just sort out the GST bill later. Each package being stopped and having to pay GST + admin fee makes it all noticeably dearer. I don't like paying $75 in GST + $40 in admin fees, that means I"m being charged 23% on a package worth $500 total rather than a much more palatable 15%. Overall I'd have to pay a fair bit of money for GST on overseas packaging, but as it isn't unfair I'd accept that and not complain.

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#1907763 25-Nov-2017 22:01

Try tracking GST against your IRD number?

If you had to give one in order for a parcel to get through customs and at the end of the year, IRD sent you a statement showing everything you'd ordered, less GST paid in advance (ie like Amazon do) and a bill for what you still owed.

Batman

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#1907767 25-Nov-2017 22:20

every online purchase must then be certified by your solicitor?

how would you know the IRD is not someone else's?

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#1907793 25-Nov-2017 23:14

Batman:

every online purchase must then be certified by your solicitor?

how would you know the IRD is not someone else's?

Computers...

Rikkitic

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#1907809 26-Nov-2017 00:20

No system is going to be perfect but I thought my idea might be reasonable, maybe with some tweaks. Far better of course would be to drop GST altogether, which is just a tax on being poor, as in, the less you have, the more it costs you.

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Batman

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#1907909 26-Nov-2017 10:59

Geektastic:

Batman:

every online purchase must then be certified by your solicitor?

how would you know the IRD is not someone else's?

Computers...

Ah you mean spying, no NZers will have none of that ID computer big brother stuff.

Look - We don't even check ID when enrolling to vote and when presenting to vote for the Government, so this won't fly I tells ya.

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Geektastic

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#1907915 26-Nov-2017 11:04

Batman:

Geektastic:

Batman:

every online purchase must then be certified by your solicitor?

how would you know the IRD is not someone else's?

Computers...

Ah you mean spying, no NZers will have none of that ID computer big brother stuff.

Look - We don't even check ID when enrolling to vote and when presenting to vote for the Government, so this won't fly I tells ya.

You have to give your address and phone number out to get the parcel, for heaven's sake!! What difference would giving out your IRD number as well make?

JimmyH

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#1907965 26-Nov-2017 14:34

Rikkitic:

Far better of course would be to drop GST altogether, which is just a tax on being poor, as in, the less you have, the more it costs you.

What do you mean?

GST is a tax on consumption. The more you spend the more it costs you.

If you mean progressivity versus regressivity then it's silly to look at one tax in isolation, you have to look at the tax system as a whole.

Rikkitic

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#1908014 26-Nov-2017 16:40

JimmyH:

GST is a tax on consumption. The more you spend the more it costs you.

If you mean progressivity versus regressivity then it's silly to look at one tax in isolation, you have to look at the tax system as a whole.

I agree that the system as a whole needs to be looked at. But a flat consumption ('sales' ) tax disproportionately burdens the poor. A poor person can choose not to buy a Mercedes, or maybe even any car, but cannot choose not to buy food, clothes, shoes for the children, rent, rates, other taxes, essential services, and all kinds of things people simply can't live without, all of which also get whacked with the 15% surcharge. The cost of a hamburger + 15% is the same whether you are a millionaire or on a benefit. The hamburger is what it is, but the 15% is just a tax. This hardly seems fair to me when it represents a much bigger chunk of the poor person's income.

At the moment there are lots of jobs, though some apparently can't be filled due to lack of qualifications or work ethic. But the future trend will almost certainly be increased automation and less employment. Tax on income has had its day. We need to move to a system of tax on the burden we place on mother earth, an environmental tax, in other words, but on steroids. The more you excrete, the more you pay, and the higher the rate. And I am not talking about another consumption tax here, though consumption would necessarily be a part of it. And no, I don't know how to work it out in practice. That will be the job of people much more clever than I am. But I know it has to happen. Otherwise we will all suffer a horrible end.

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#1908016 26-Nov-2017 16:49

Rikkitic:

JimmyH:

GST is a tax on consumption. The more you spend the more it costs you.

If you mean progressivity versus regressivity then it's silly to look at one tax in isolation, you have to look at the tax system as a whole.

I agree that the system as a whole needs to be looked at. But a flat consumption ('sales' ) tax disproportionately burdens the poor. A poor person can choose not to buy a Mercedes, or maybe even any car, but cannot choose not to buy food, clothes, shoes for the children, rent, rates, other taxes, essential services, and all kinds of things people simply can't live without, all of which also get whacked with the 15% surcharge. The cost of a hamburger + 15% is the same whether you are a millionaire or on a benefit. The hamburger is what it is, but the 15% is just a tax. This hardly seems fair to me when it represents a much bigger chunk of the poor person's income.

At the moment there are lots of jobs, though some apparently can't be filled due to lack of qualifications or work ethic. But the future trend will almost certainly be increased automation and less employment. Tax on income has had its day. We need to move to a system of tax on the burden we place on mother earth, an environmental tax, in other words, but on steroids. The more you excrete, the more you pay, and the higher the rate. And I am not talking about another consumption tax here, though consumption would necessarily be a part of it. And no, I don't know how to work it out in practice. That will be the job of people much more clever than I am. But I know it has to happen. Otherwise we will all suffer a horrible end.

Well, to put your plan into action the most obvious thing we need to do is to start actually taxing having children. It has been demonstrated recently by a Swedish university that having children is the single worst thing you can do for the planet.

However most tax systems at present pay benefits in one form or another to people with children.

I would suggest that, in order to reflect the environmental consequence of children, income tax on parents should increase 5% per child. At the very least, all forms of benefit for having them should cease.

However, realpolitik dictates that none of that will ever happen until some form of collapse occurs or a pandemic thins the herd.

"Eating meat, driving a car and travelling by aeroplane made up the list of the most polluting things people can do to the planet.

But having children was top, according to the new study, published in the journal Environmental Research Letters.

“A US family who chooses to have one fewer child would provide the same level of emissions reductions as 684 teenagers who choose to adopt comprehensive recycling for the rest of their lives,” it said."

Rikkitic

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#1908023 26-Nov-2017 17:11

I actually agree with you on this, though I know you just don't like children. Maybe I should clarify. I agree that there are plenty of people already, and we don't really need more at this time, so having more just places an unnecessary extra burden on the planet. Unfortunately, people get very emotional about their right to bear children, and I can't say I blame them. Kids are neat. They are a lot of fun. They teach us about ourselves and they complete the circle of life. I have been there. I like children, though I don't like some of the things they do.

So should the right to breed be restricted to the well-off? That is a pretty hard one to get past voters, especially the ones who are not well-off.

It has been observed that the best way to reduce population growth is to increase the standard of living. I believe Japan already has negative population growth, and the pension planners are very worried about this. So maybe the solution is just to increase income. If everyone has a bigger slice of the pie, they may be less inclined to spread it amongst their offspring.

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Geektastic

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#1908102 26-Nov-2017 18:58

Rikkitic:

I actually agree with you on this, though I know you just don't like children. Maybe I should clarify. I agree that there are plenty of people already, and we don't really need more at this time, so having more just places an unnecessary extra burden on the planet. Unfortunately, people get very emotional about their right to bear children, and I can't say I blame them. Kids are neat. They are a lot of fun. They teach us about ourselves and they complete the circle of life. I have been there. I like children, though I don't like some of the things they do.

So should the right to breed be restricted to the well-off? That is a pretty hard one to get past voters, especially the ones who are not well-off.

It has been observed that the best way to reduce population growth is to increase the standard of living. I believe Japan already has negative population growth, and the pension planners are very worried about this. So maybe the solution is just to increase income. If everyone has a bigger slice of the pie, they may be less inclined to spread it amongst their offspring.

I suspect the solution will - eventually - be engineered in a lab and released into the population via aerosol delivery...!

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