GST to be charged on purchases below $400

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#2006738 2-May-2018 20:03

sbiddle:

rugrat: A lot of parcels I receive have a lot less written on them, then what I paid for value written on outside. Guessing it’s what the company would want in insurance if parcel lost.

I hope you are aware of the risks of this if it's a regular thing. Many people globally will try and convince sellers to falsify the customs declaration to avoid paying local duties, and many things ex China will be like this without even asking. The problem is if Customs decide to inspect the package and decide on their own value, it's you as the buyer who will be liable for the falsification, not the seller. You will need to pay GST and/or duty on what they deem the value to be.

Without saying too much slip it's safe to say a lot of people have no idea at all what goes of in regards to package processing, inspection and monitoring of good and addresses that goes on. It's probably why so many people get busted importing restricted drugs from overseas - they think the postal process is as close to anonymous as you can get, but the reality is that it's far from it.

Didnt work out well for this lot - https://www.stuff.co.nz/business/industries/80159834/Fashion-label-Federations-resurrection-a-cautionary-tale-for-importers

Richard rich.ms

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#2006739 2-May-2018 20:05

Talkiet:

Brilliant! So next time I am on holiday I can send you a piece of art I made which is valued at $1M, but I'll declare it as $50. If I send this from a suitably lax foreign country, I have just landed you with a huge bill and perhaps legal action for trying to avoid GST?

It doesn't make logical sense that the receiver is responsible.

I hope that they dont expect me to pay GST on random questionable aliexpress sex toys that seem to turn up in the PO Box occasionally since I did a few unboxing videos a while ago.

Richard rich.ms

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#2006740 2-May-2018 20:08

tdgeek:

Thats the big issue. Bricks and mortar, insurance, power, cleaners and many so ons. The benefit is local warranties, and you can take it home now. The disadvantage is they cannot compete on price, and these days thats almost all that matters. Businesses in NZ need to look at competition and if they are competing with online, bug out. Then the purchasers will still whine as no warranty, after they whined about high prices and ditched local sellers.

If only. Try doing a special order at bunnings or mitre10 and see how frustrating things can be. When they are too useless to sort that process out they have no business complaining when I go on amazon and order the spare parts for my sander at 1/4 the price delivered to me with a few mouse clicks.

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#2006804 2-May-2018 22:59

While it will negatively impact me, the government really did need to move forward with putting GST on low value online purchases.

Example of the current situation: Fashion brand "Forever New" operates bricks and mortar stores in NZ. It has a NZ webstore, but goods are delivered from their Australian warehouse. pricing is in AUD, and free shipping to NZ is offered. Specials on the webstore often undercut the physical stores. They have the below disclaimer.

ALL PRICES ARE IN AUSTRALIAN DOLLARS(AUD) AND WILL BE CHARGED IN AUSTRALIAN DOLLARS

The total amount in New Zealand Dollars (NZD) that you will see on your bank statement will be charged at the exchange rate determined by your bank or financial institution at the time of transaction.

Local taxes, fees and/or duties are not included in the purchase price and are the customer’s responsibility. New Zealand GST, fees and duties may be payable in addition to the purchase price. For further details and to obtain an estimate of any GST, fees and duties you may need to pay, please see www.customs.govt.nz. Click here for further information on a FAQ page.

If we continue to not collect gst on low value purchases, We will see more and more businesses set up similar distribution models to take advantage of this policy....

Linuxluver

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#2006806 2-May-2018 23:09

Scott3:

If we continue to not collect gst on low value purchases, We will see more and more businesses set up similar distribution models to take advantage of this policy....

They seem to be aware we're supposed to pay GST on purchases over $60 (including shipping cost)......though the government doesn't actively collect it under $400......doesn't mean you shouldn't be paying it. (Technically).

So any taxes are the customer's responsibility.

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Linuxluver

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#2006808 2-May-2018 23:11

Geektastic: And the real reason is....

“The Government estimates the proposal will be able to collect $53 million in revenue in 2019/20, $78 million in 2020/21 and $87 million in 2021/22.”

Nothing to do with the unicorn of fairness.

It serves both purposes.

That sort of thing is possible, you know....

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sbiddle

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#2006859 3-May-2018 07:34

Linuxluver:

Scott3:

If we continue to not collect gst on low value purchases, We will see more and more businesses set up similar distribution models to take advantage of this policy....

They seem to be aware we're supposed to pay GST on purchases over $60 (including shipping cost)......though the government doesn't actively collect it under $400......doesn't mean you shouldn't be paying it. (Technically).

So any taxes are the customer's responsibility.

Just for clarification $60 isn't a limit for purchases, it's a de minimis amount.

The de minimis figure ($60) is the tax threshold where it's deemed appropriate to collect tax as the costs of collection will exceed the gains below this.

On a $400 purchase that has no duty the GST component is $60 and therefore $400 with of goods becomes the trigger level for payment of GST. If goods have a duty applied the $400 limit is lower - so in the case of clothes or shoes which have GST and duty applied, you can only import around $227 worth of goods before you hit the $60 limit and have to pay taxes, duty, and then the IETF and biosecurity fees.

The changes will actually make it more cost effective to import clothing and shoes and you'll actually save money. If you import a pair of shoes that cost NZ$227 now you'll have to pay an additional $109.40 in GST, duty, IEFT and biosecurity fees. After this change you'll only pay an additional $37.46 in GST.

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surfisup1000

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#2006871 3-May-2018 08:05

sbiddle:

If you import a pair of shoes that cost NZ$227 now you'll have to pay an additional $109.40 in GST, duty, IEFT and biosecurity fees. After this change you'll only pay an additional $37.46 in GST.

I bought a pair of shoes from amazon for several hundred dollars ....customs didn't charge me extra when it came into NZ. They already have some kind of agreement with amazon in place, so maybe they don't enforce it.

Or it is just random depending on their workload levels.

Duty on shoes is a bit off though. Time to leave the past I think. We'll never have a thriving shoe industry, don't have the style or the cheap labour costs.

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#2006881 3-May-2018 08:38

surfisup1000:

We'll never have a thriving shoe industry, don't have the style or the cheap labour costs.

NZ used to have a huge shoe industry, and I actually read about this a day or two ago in relation to the GST changes. Up until the early '90s around 95% of shoes sold in NZ were made in NZ.

The days of needing duty charges are over though, other than niche providers in the high end we'll never be able to compete on price.

JimmyH

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#2006891 3-May-2018 09:07

sbiddle:

NZ used to have a huge shoe industry, and I actually read about this a day or two ago in relation to the GST changes. Up until the early '90s around 95% of shoes sold in NZ were made in NZ.

The days of needing duty charges are over though, other than niche providers in the high end we'll never be able to compete on price.

I'm old enough to remember that, and for the average family it was awful.

Shoes were phenomenally expensive because of the inefficient local manufacturing and the wall of steep tarrifs and tight quotas put in place to protect it. Purchasing a pair of shoes like school shoes was a major financial decision for a low income family (and I can remember children getting detention for wearing the wrong shoes because their families literallly couldn't afford a pair). No one I knew had more than a couple of pairs of shoes because families literally couldn't afford them.

The range was narrow and quality wasn't good. I remember we had to get these atrocious locally made "Charlie Browns" for school. My recollection was that they cost well over $100 in the mid eighties. When wages were much lower than now. The soles were stiff and inflexible, and literally painful to wear when you got them. Later they stared to flex, but then went gooey and tacky and stuck to everything.

Now we have loads of choice, and shoes are far more affordable.

tdgeek

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#2006896 3-May-2018 09:14

JimmyH:

sbiddle:

NZ used to have a huge shoe industry, and I actually read about this a day or two ago in relation to the GST changes. Up until the early '90s around 95% of shoes sold in NZ were made in NZ.

The days of needing duty charges are over though, other than niche providers in the high end we'll never be able to compete on price.

I'm old enough to remember that, and for the average family it was awful.

Shoes were phenomenally expensive because of the inefficient local manufacturing and the wall of steep tarrifs and tight quotas put in place to protect it. Purchasing a pair of shoes like school shoes was a major financial decision for a low income family (and I can remember children getting detention for wearing the wrong shoes because their families literallly couldn't afford a pair). No one I knew had more than a couple of pairs of shoes because families literally couldn't afford them.

The range was narrow and quality wasn't good. I remember we had to get these atrocious locally made "Charlie Browns" for school. My recollection was that they cost well over $100 in the mid eighties. When wages were much lower than now. The soles were stiff and inflexible, and literally painful to wear when you got them. Later they stared to flex, but then went gooey and tacky and stuck to everything.

Now we have loads of choice, and shoes are far more affordable.

Yep, wear them in, or more accurately, chafe them in

Batman

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#2006898 3-May-2018 09:16

surfisup1000:

sbiddle:

If you import a pair of shoes that cost NZ$227 now you'll have to pay an additional $109.40 in GST, duty, IEFT and biosecurity fees. After this change you'll only pay an additional $37.46 in GST.

I bought a pair of shoes from amazon for several hundred dollars ....customs didn't charge me extra when it came into NZ. They already have some kind of agreement with amazon in place, so maybe they don't enforce it.

Or it is just random depending on their workload levels.

Duty on shoes is a bit off though. Time to leave the past I think. We'll never have a thriving shoe industry, don't have the style or the cheap labour costs.

Umm ... 'tis because Amazon has already charged you the GST at checkout.

Which makes me think - it's actually very easy to implement a blanket Amazon tax. Just apply GST to everything at checkout.

But I hope they DROP the $40+ paperwork/duty bit ... since there is nothing for customs to do ...

networkn

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#2006941 3-May-2018 10:03

surfisup1000:

Duty on shoes is a bit off though. Time to leave the past I think. We'll never have a thriving shoe industry, don't have the style or the cheap labour costs.

Sadly you are dreaming if you think that this Government is going to remove ANY form of Taxes or Tarrifs, in fact they will just use wordplay to add more.

Rudster

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#2006947 3-May-2018 10:32

Honestly I would rather this over a sugar tax considering and they way it's being implemented isn't bad.

Amazon already charges tax on purchases over $400 to try to smooth shipment to NZ. Shops that don't sell I think $65,000 worth of good per year? to NZ won't have to worry about it so orders like my custom shirt from Poland won't be stopped at the border but a large chunk of products will not have gst applied. Means a small bump in price sure but if you consider the fact that many products are still much cheaper even with tax applied compared to ordering here. For example last month I ordered a pair of Planar Magnetic Headphones. Something you don't really have much option when buying locally. There is a store locally that sells them but when you compare the Amazon price of $250 USD plus shipping and tax with $800 NZD, you're still going to order from online.

With shoes I'm not sure what's going on there. I ordered a pair of doc's from Australia, $90 NZD. Didn't pay any tax. Maybe I was lucky. But for me, And extra $13.50 isn't the end of the world. The question is whether mid sized store that don't sell a lot to NZ but still break the threshold of 65k will they continue supporting online sales here? The cost to them might be worth more than the sales and would rather push for for people to buy locally which while positive for local businesses, will impact pricing here negatively as I'm sure for some products, competition will disappear from overseas allowing for price hikes.

This isn't an all bad solution, as long as local businesses start charging reasonable prices for goods here. Sure the lack of GST on a lot of products has made it harder for local businesses but the blame is also on them for pricing themselves out of the market. Who wants to pay $200 for a pair of decent jeans when you can order the exact same pair online for $50?

Rikkitic

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#2007123 3-May-2018 14:00

networkn:

Sadly you are dreaming if you think that this Government is going to remove ANY form of Taxes or Tarrifs, in fact they will just use wordplay to add more.

Boring.

Plesse igmore amd axxept applogies in adbance fir anu typos

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