tdgeek:

 

 

 

My suggestion was that there is no way that we can have all offshore retailers being GST registered or forcing them to add GST to their foreign invoice and send the funds to the IRD. The banking system is one system that is intermediary, hence it will be common to almost everyone. if there was a way to tag  NZ payments to offshore as for importing goods, to bill GST by the NZ paying bank. Just an idea.  At least that is ONE system, whereas we cant get every overseas retailer to collect GST and send it to the IRD. On the surface it seems relatively clean

 

The biggest flaw with using the banking system is that there is no way to identify what transactions would be eligable for GST vs those that aren't. Just because a transaction with a foreign retailer or service provider takes place doesn't mean GST needs to be paid. 

Gordy7:

 

Slightly off topic...

 

How much gst is Govt missing out on for cash goods and services and bartered goods?

 

 

 

 

 

not just GST but general taxes, i think the IRS said it was hundreds of million $ a year and were trying to clamp down but it is just about impossible to really know.

I also don't specifically buy to avoid tax but I buy to save money, even if that difference happens to be 15%, we vacuum up enough money each month and any saving adds up.

Don't see why extra duties like biosecurity should be added if GST is added (especially if its a flat rate) - its waved at the moment below a certain value, so does that mean it doesn't get done - no idea.

Also, in my ignorance, I though AliExpress was just a marketplace for sellers, why should it apply gst to them, would it apply to the AliExpress company or would they be expected to apply only to their bigger customers. If they told NZ to get lost, how would NZ say ban them, surely all they have to do is but stuff in a brown paper bag and write Gift on it or something ?

 I don't think it will make as much difference as retailers believe, it lowers the bar a little in that some foreign products will no longer be price competitive.  But there will still be a massive range of products that will still be cheaper to import. 

Some countries require you to collect imports from the post office. So it is easy, if parcel value is $100 then you pay the $15 GST via eftpos at the postoffice.   It works OK, leveraging existing infrastructure and you don't need to impose rules on foreign suppliers. 

sbiddle:

 

tdgeek:

 

 

 

My suggestion was that there is no way that we can have all offshore retailers being GST registered or forcing them to add GST to their foreign invoice and send the funds to the IRD. The banking system is one system that is intermediary, hence it will be common to almost everyone. if there was a way to tag  NZ payments to offshore as for importing goods, to bill GST by the NZ paying bank. Just an idea.  At least that is ONE system, whereas we cant get every overseas retailer to collect GST and send it to the IRD. On the surface it seems relatively clean

 

 

The biggest flaw with using the banking system is that there is no way to identify what transactions would be eligable for GST vs those that aren't. Just because a transaction with a foreign retailer or service provider takes place doesn't mean GST needs to be paid. 

 

Yes, I realise that. There would need to be some way to tag those. At least there is only one system. We cannot ask retailers to do it, the large ones we can, are few in number. So if we cannot have GST added by the retailer and we cannot use the bank system, we cannot charge GST on the ever increasing numbers of smaller purchasers.

Its all about revenue raising folks, Jacinda and her government has to pay for the free education and parental leave somehow and this is just the start.

[Mod edit (MF): no funny names]

Malpaso:

 

Its all about revenue raising folks, Jacinda and her government has to pay for the free education and parental leave somehow and this is just the start.

 

What rubbish. Are you suggesting that GST be removed for ALL goods and services, given that collecting revenue on online purchases is no different, it just happens to not be implemented as there is no easy means yet

If you cant contribute anything meaningful, you should post your political rant in the Politics forum, the JA bashing thread.

BTW, parental leave is also a National policy, and they want more

tdgeek:

 

 

 

Yes, I realise that. There would need to be some way to tag those. At least there is only one system. We cannot ask retailers to do it, the large ones we can, are few in number. So if we cannot have GST added by the retailer and we cannot use the bank system, we cannot charge GST on the ever increasing numbers of smaller purchasers.

 

 

 

Which are exactly the funamental issues that have been raised by IRD and Customs in their discussion papers.

There isn't a solution to this problem anywhere in the world - Australia was the first to try and do something and they're pretty much in the same boat as NZ will be by demanding GST be paid, but without any real world ways of collecting it for all goods.

It's been pretty well established in discussion papers that collecting GST on all goods entering NZ is a logisitcal nightmare that realictically can't be solved overnight, and that the costs of solving such a problem may be so much that it simply won't stack up financially to do it.

I suspect going forward we'll have a multi tier system - digital imports will continue to be taxed as they are now, imports from big players such as Amazon will be taxed (and collect the tax themselves), and that the de minimis figure will stay as it is or only be reduced slightly. The problem is without the UPU changing the global postal system to include forward notifications of all packages in an electronic form than the costs to cut the de minimis and process every item would blow out to such an extent that the costs to process packages would have to be passed on to customers meaning it could sudenly cost $70+ to import a package.

surfisup1000:

 

 

 

 I don't think it will make as much difference as retailers believe, it lowers the bar a little in that some foreign products will no longer be price competitive.  But there will still be a massive range of products that will still be cheaper to import. 

 

Some countries require you to collect imports from the post office. So it is easy, if parcel value is $100 then you pay the $15 GST via eftpos at the postoffice.   It works OK, leveraging existing infrastructure and you don't need to impose rules on foreign suppliers. 

 

 

 

It's similar to capital gains tax - it won't change house prices much (see UK and Australia for details....!) but it will make more tax at our expense.

Likewise, the GST won't do what retailers seem to have deluded themselves into thinking it will do, because the price difference is not merely the 15% in almost every case, it is many many times more than that even allowing for the usually expensive cost of shipping to NZ.

The current system works just fine to be honest and really there is no sensible reason to mess with it.

sbiddle:

 

trig42:

 

I support the Government trying to collect the GST on overseas purchases, I just hope that they can work out a way to do it that doesn't cost them more than the revenue they will earn from it. Wait and see how it works in Australia, and copy their system (make retailers that sell more than $60,000 - the current threshold for GST registration here - register for GST and collect it). If it is paid at point of purchase, there should be no need for the IETF/Biosecurity fees at the border.

 

 

MPI biosecurity costs should still need to be paid regardless of where the GST is collected. MPI works on a cost recovery basis, so if you're importing goods you should contribute to inspection fees.

 

How is it fair that goods from an Australian retailer who collects GST are treated differently to somebody who imports goods and has to pay GST and MPI costs at the border? Your goods still have to be screened at the border.

 

 

 

 

 

If MPI works on a cost recovery basis, is it the case that none of their funding comes from taxation?

surfisup1000:

 

Some countries require you to collect imports from the post office. So it is easy, if parcel value is $100 then you pay the $15 GST via eftpos at the postoffice.   It works OK, leveraging existing infrastructure and you don't need to impose rules on foreign suppliers. 

 

Sorry, no, that won't work. Lots of stuff I buy from AliExpress comes with the "Gift" tick box checked. I've also had the vendor say to me (completely out of the blue) that they'll write a value on the parcel of $US99 (actual price $US225, so not enough to attract GST) to save me taxes. I replied that there was no need, but he came back saying it wasn't a problem. It seems that defrauding the tax system is just normal business practice for (at least some of) AliExpress's suppliers.

OTOH, I think the IRD is going to have to be more creative than these seasoned bandits to collect tax at the source.

Secondly, lots of towns don't have post offices any more. And the post office would need to have extended business hours to accommodate people who work normal business hours. (This is already a PITA when couriers leave there cards in the letterbox).

frankv:

 

surfisup1000:

 

Some countries require you to collect imports from the post office. So it is easy, if parcel value is $100 then you pay the $15 GST via eftpos at the postoffice.   It works OK, leveraging existing infrastructure and you don't need to impose rules on foreign suppliers. 

 

 

Sorry, no, that won't work. Lots of stuff I buy from AliExpress comes with the "Gift" tick box checked. I've also had the vendor say to me (completely out of the blue) that they'll write a value on the parcel of $US99 (actual price $US225, so not enough to attract GST) to save me taxes. I replied that there was no need, but he came back saying it wasn't a problem. It seems that defrauding the tax system is just normal business practice for (at least some of) AliExpress's suppliers.

 

OTOH, I think the IRD is going to have to be more creative than these seasoned bandits to collect tax at the source.

 

Secondly, lots of towns don't have post offices any more. And the post office would need to have extended business hours to accommodate people who work normal business hours. (This is already a PITA when couriers leave there cards in the letterbox).

 

 

 

Marking something as a gift does not make it exempt from GST and or duty. All it means is that it's applicable for a $110 gift threshold. 

There was an paper from NZ post released under the OIA discussing the changes where they talked about the requirement for a new $20 million warehouse just to process all goods and the expectation of a $20 charge for every parcel to recover costs for extra staff to process all goods.

So reducing the de minimis will mean every package will cost $70 in processing charges when it arrives in the country via NZ Post. Courier / freight companies obviously won't change as they are already fully electronic.

Gst is supposed to be on goods and services supplied in New Zealand clearly they are not supplied in nz?

So the issue is cost of the goods is subject to gst or the whole transaction value,shipping etc.

It will take more time to collect than is warranted.

Geektastic:

 

It's similar to capital gains tax - it won't change house prices much (see UK and Australia for details....!) but it will make more tax at our expense.

 

The lack of a comprehensive capital gains tax does skew investment decisions though . Australian house prices might have increased even further if they did not have a CGT.  It was inevitable for asset prices to rise anyway because of the huge amount of money that was printed. 

I'm all for a CGT if they reduce income taxes to compensate. 

House prices are ridiculously high because of the huge increase in monetary supply (US and UK printed a crap load of money) and very low interest rates.   Interesting times , because quite a few people are saying the debt monster that we have created could destroy the global economy.