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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883 posts

Ultimate Geek

#1902705 16-Nov-2017 13:07

Stop worrying. It's not happening anymore - https://www.stuff.co.nz/business/industries/98941633/waters-left-muddy-on-amazon-tax-after-minister-jumps-gun

Amanon

Azzura

603 posts

Ultimate Geek

ID Verified

#1902706 16-Nov-2017 13:07

Perhaps, retailers already know that the %15 GST isn't going to have much of an effect on online purchases. But their goal is to get the gov collecting it no matter what the costs. Inflating online overseas purchases even more due to gov slapping on fees to make it worthwhile or just to break even.

Also, to make it as inconvenient as possible.

dafman

3925 posts

Uber Geek

Trusted

#1902721 16-Nov-2017 13:39

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.

I don't mind paying GST on my discretionary overseas purchases if it creates a level playing field for local companies, plus contributes to fixing years of social neglect.

SaltyNZ

8218 posts

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2degrees

Lifetime subscriber

#1902726 16-Nov-2017 13:47

sam395:

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

No, it's for goods and services *consumed* in New Zealand. That's why you don't pay GST on international roaming charges, for example - despite the fact that they are supplied as much by your home carrier as by the roaming carrier, they are consumed outside NZ. That's also why you can claim back the GST on goods you bought in NZ but are taking permanently out of the country.

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UHD

655 posts

Ultimate Geek
Inactive user

#1902778 16-Nov-2017 15:13

SaltyNZ:

Weren't they already doing that?

Edit - yes, but not for little stuff, apparently.

Ah well, I guess the $2 phone cases I buy for my daughter off Ali Express instead of $20 from the mall will now be $2.30 cases instead of $20. That'll make me think twice about disadvantaging the local retailers.

+$35 customs "administration fee" :)

nzkiwiman

2585 posts

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Subscriber

#1902779 16-Nov-2017 15:24

Most of the products I purchase overseas are not purchased because it's cheaper to secure from overseas, but because local retails, distributors, wholesalers etc etc are just not interested in stocking the items.

So tell me Retail NZ, how does adding GST to my overseas purchases help you?

sir1963

3260 posts

Uber Geek

Subscriber

#1902790 16-Nov-2017 16:08

gcorgnet:

In the current state of things, in most cases, a 15% tax will still have the overseas alternative cheaper than the NZ retails.

Bottom line is this won't help anyone except maybe the government by raising tax revenue.

One positive, sh!tty NZ retails won't have an excuse anymore and will either go away or step up their game

It may have the opposite effect to the one retailers want.

If you are going to pay GST on everything, then you may as well buy in MORE stuff because its not as though you will be making that tax threshold savings anymore.

Paying the GST will not change my buying habits, for the stuff that I buy in I ma saving anywhere between 50-90% compared to NZ retailers.

As we keep being told, we are now living in a global economy, and I don't see why only corporations should benefit from that.

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sir1963

3260 posts

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Subscriber

#1902792 16-Nov-2017 16:11

UHD:

SaltyNZ:

Weren't they already doing that?

Edit - yes, but not for little stuff, apparently.

Ah well, I guess the $2 phone cases I buy for my daughter off Ali Express instead of $20 from the mall will now be $2.30 cases instead of $20. That'll make me think twice about disadvantaging the local retailers.

+$35 customs "administration fee" :)

so now you buy in 20 of them, sell of 19 @$4 on trademe and keep the one you want.

Local retailer misses out on 19 more sales, government misses out of the taxes from 19 higher priced items, and you make a couple of dollars in the process.

sir1963

3260 posts

Uber Geek

Subscriber

#1902796 16-Nov-2017 16:20

surfisup1000:

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.

I see the Wellington rental housing stocks have fallen near 70%, Auckland about 50%.

Rents are increasing because of it.

Taking that much investment in housing is not going to increase the number of houses built, if anything it will make matters worse.

Rentals are like any business (and it is a business), people will only invest when they can make money from it.

sam395

8 posts

Wannabe Geek

#1902856 16-Nov-2017 17:20

I don't know what the retailers a whinging about they only pay Gst on profit they claim back gst expenses,where as the overseas importer pays it on the cost of the transaction not just the cost.

Lastman

306 posts

Ultimate Geek

#1902862 16-Nov-2017 17:36

sam395:
I don't know what the retailers a whinging about they only pay Gst on profit they claim back gst expenses,where as the overseas importer pays it on the cost of the transaction not just the cost.

It might be worth noting that retailers do not pay any GST, they collecy GST on behalf of the consumer who makes a purchase.

Companies like Apple deceptively include value added taxes in the totals they use to try to demonstrate the amount of taxes they pay but it’s the consumer’s power to pay the tax by buying the product or choosing not to.

mattwnz

20141 posts

Uber Geek

#1902865 16-Nov-2017 17:52

sam395:

I don't know what the retailers a whinging about they only pay Gst on profit they claim back gst expenses,where as the overseas importer pays it on the cost of the transaction not just the cost.

Beucase it is the consumer that has to pay the GST, if they buy from a NZ store. So that makes the goods NZ retailers are selling more expensive than overseas store, as they have to add the GST onto the price. The retailer doesn't get the money from GST, the government does. So effectively the government are getting money off NZ retailers for goods, but not from overseas retailers. So adding GST to both NZ and overseas goods helps both the tax payer in getting more tax to pay for things like health and education. It also makes it a more level playing field when NZ retailers compete against overseas ones. I can't see overseas retailers absorbing the cost.

SirHumphreyAppleby

2844 posts

Uber Geek

#1902909 16-Nov-2017 19:39

sir1963:

If you are going to pay GST on everything, then you may as well buy in MORE stuff because its not as though you will be making that tax threshold savings anymore.

This is exactly right. With the additional fees, a $400 item incurs a ~27.5% penalty. Having the retailer charge GST and scrapping the other charges would allow me to buy more items in the $400-500 range. It's rare for me to import anything more expensive than that as it's beneficial to have local warranties, and expensive items usually don't have the same absurd markups.

UHD

655 posts

Ultimate Geek
Inactive user

#1902911 16-Nov-2017 19:40

Cue the rise of different marketplaces which do not collect GST on behalf of the NZ government because they aren't based here and are not subject to NZ law. :)

Aredwood

3885 posts

Uber Geek

#1902922 16-Nov-2017 20:44

surfisup1000:
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.

Be careful what you wish for. As the easiest way of avoiding a capital gains tax is to not sell any houses. In other words people will only sell their houses if they have to. A CGT might actually cause house prices to increase. As less people selling means less houses available, therefore prices rise due to lower supply.

Imagine you have a growing family or you want to move to a new area, meaning You need a bigger or new house. You are now more likely to either over capitalise the house with expensive renovations instead of selling and buying a bigger house. Or you will still buy the new house and keep the old one as a rental. Even if both options mean loosing money, the loss is offset by not needing to pay a CGT.

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