Retailers Trying to End Overseas GST Free Purchases

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#784952 21-Mar-2013 13:39

The GST refund when leaving Oz as a tourist "helps" their retailers too, maybe we should be doing that here instead?

But then the government misses out.

Gilco2

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#784961 21-Mar-2013 13:52

I would possibly still buy books from Amazon if gst was added. Like I bought a $10NZ book from Amazon which with shipping came to $22nz. To buy the same book from Whitcoulls is $49.99. Even if that book was $30 from Whitcoulls I would have bought it but no way at $50.

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#785006 21-Mar-2013 14:39

Of course, another solution would be to make everything sold in NZ and costing less than $400 free of GST too

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Personally I don't have much sympathy for the retailers at all, for some of the reasons said by others as well as other reasons as well.

And looking at it the other way around, I know a very well run and efficient NZ retailer who has a web store (has a fully stocked walk in physical outlet as well) who sells a lot to overseas customers, including one line he imports from a country in Europe and for which he gets orders from customers in that country because his price is cheaper, despite shipping from there to here and then back again. He says there are others like him.

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#785029 21-Mar-2013 15:05

John2010: Of course, another solution would be to make everything sold in NZ and costing less than $400 free of GST too .

I realise that your comment was totally in jest, nonetheless it would be lot of fun to work around ("Buy this MacBook Pro for six easy GST-free payments of $399.99").

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#785030 21-Mar-2013 15:07

John2010: And looking at it the other way around, I know a very well run and efficient NZ retailer who has a web store (has a fully stocked walk in physical outlet as well) who sells a lot to overseas customers, including one line he imports from a country in Europe and for which he gets orders from customers in that country because his price is cheaper, despite shipping from there to here and then back again. He says there are others like him.

This is the thing. Rather than updating their business practices to align with reality, these retailers are trying to shift reality to suit their outmoded business practices. It sounds all too familiar...

NonprayingMantis

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#785050 21-Mar-2013 15:39

because of the way this law works, you get crazy situations where retailers who sell things online can sell overseas and charge no GST even when in their own country they do pay GST.
this means that a company could set up in australia and export to NZ at a cheaper priceprovided shipping was less than 15% of the total price. for software type goods (anything downloadable) the shipping price is 0, so it createsincentives for Apple et al to incorporate in Oz to sell to NZ, and vice versa to sell to OZ. bizarre

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#785064 21-Mar-2013 16:00

The problem with many NZ retailers now, is that they are normally selling things at inflated prices, and then they have regularly 30-50% sales that bring the prices down to what they should be normally selling it at. This practice is being used more and more by the big retailers, instead of having an everyday low price. These retailers need to understand that they need to offer something more, such as better serve. Last time I went into a shoe shop, none helped me try on shoes, so the service isn't great, but they don't get paid well either.
It is a bit like the carpark, cellphone taxes, where the cost of admin is too high, compared to the tax it may bring in. We do have some tarrifs on things like shoes that bring the threshold down anyway.
I think they would be better to concentrate the cash economy where they estaimte upto 8 billion in taxes is being lost per year, which isn't much less than what NZ has to borrow. Seven sharps story on this was quite enlightening. Anyone doing or accepting a cash job without paying tax is ripping off NZers.

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#785068 21-Mar-2013 16:03

NonprayingMantis: because of the way this law works, you get crazy situations where retailers who sell things online can sell overseas and charge no GST even when in their own country they do pay GST.
this means that a company could set up in australia and export to NZ at a cheaper priceprovided shipping was less than 15% of the total price. for software type goods (anything downloadable) the shipping price is 0, so it createsincentives for Apple et al to incorporate in Oz to sell to NZ, and vice versa to sell to OZ. bizarre

This is why you are now getting a lot of businesses that appear to look like NZ businesses with a NZ domain and phone number now targeting NZ. They make themselves look like they are a NZ business, yet they pay no GST or TAX to NZ. NZ retailers who have their own website have to pay GST and TAX, so their prices have to be higher to accommodate this.

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#785158 21-Mar-2013 19:26

I doubt it would make much difference to retailers making all the noise. I got a book I wanted from the UK for under 10 pounds (cost was circa $16 including shipping from memory). Whitcoulls price was $49.95. Same thing on a Nokia USB charging cable - local price $89, import price (for generic) $4.00 incl postage. Charge the GST and bump the cost up to $18 for the book or $4.60 for the cable if you like, it won't change behavior much except at the very margin. What it will do is immobilise Customs with hundreds of thousands of low value transactions, that have admin costs vastly in excess of the tax collected. Rather than bringing in $300m, I wouldn't be surprised if that was the net cost to government!

Interesting that it's the booksellers leading this. Apart from the fact that they are utterly uncompetitive and finally getting their just desserts after gouging us with monopolistic practices for decades, it feels a bit to me like a Mel Brooks comedy sketch about two buggy whip sellers endlessly scheming to get the upper hand, without noticing that all the customers have left and quietly gone down the road to the car yard.

Frankly, physical books are becoming rapidly less relevant. The market is moving rapidly to ebooks. What are Customs going to do - hold the electrons in a bucket at the border until duty is paid?

Edit: Grammar. D'oh.

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#785162 21-Mar-2013 19:36

$400 + GST actually works out a lot more than just the GST

don't forget the $38 in admininstration fees and biosecurity fee too

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#785167 21-Mar-2013 19:52

mattwnz:
NonprayingMantis: because of the way this law works, you get crazy situations where retailers who sell things online can sell overseas and charge no GST even when in their own country they do pay GST.
this means that a company could set up in australia and export to NZ at a cheaper priceprovided shipping was less than 15% of the total price. for software type goods (anything downloadable) the shipping price is 0, so it createsincentives for Apple et al to incorporate in Oz to sell to NZ, and vice versa to sell to OZ. bizarre

This is why you are now getting a lot of businesses that appear to look like NZ businesses with a NZ domain and phone number now targeting NZ. They make themselves look like they are a NZ business, yet they pay no GST or TAX to NZ. NZ retailers who have their own website have to pay GST and TAX, so their prices have to be higher to accommodate this.

Like iTunes. Imagine if the government could collect the tax on THAT!

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#785174 21-Mar-2013 20:15

Even with adding GST, stuff is still usually a lot cheaper from overseas online.. not to mention that collecting GST over $0 will cost more than they'll collect AND will hold up your packages for weeks, probably. (Given how customs is saying they're already understaffed)

Shock

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#785189 21-Mar-2013 20:49

You get the feeling that the retailers association hasn't listened to their customers (not members) about why they shop overseas.

Personally I will look and see if I can get it locally first at a comparable price. Most times (in my case shoes & books) I cannot find them here and so look overseas for retailer.

There are huge price discrepancies that exist. Whilst in Melbourne recently I picked up a pair of shoes for $140NZD that if I could find here would cost me $200 - 250.

Another example is a book collection I am looking at $74NZD + shipping from Amazon, from NZ retailers I am looking at anywhere from $150 to $292 NZD + shipping.

If this proposal was to go ahead, what would it take I wonder for someone like Amazon to setup shop here and still sell at their current prices ? They would make a killing.

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kyhwana2

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#785197 21-Mar-2013 21:06

Hah, try buying Vibram Fivefingers here, unless they're on special/getting rid of stock, it's always cheaper to buy overseas and get shipped via youship. I havn't been charged GST/customs fee's for them yet, but even so they're still cheaper from overseas.

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#785243 21-Mar-2013 22:45

I'm usually on my phone in shops comparing prices. Its not just overseas that is shops problems. If I can get something off a trademe seller for way cheaper than a shop, I usually will.

Often check pricespy or whatever when I am in shops, and as more and more other online only retailers are getting online with stuff its easier to find things cheaper.

Shops for low to mid end things are typically useless, and as a percentage the overcharging of high end stores isnt that great and they tend to actually offer somewhat useful advise.

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