GST to be charged on purchases below $400

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trig42

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#2068716 6-Aug-2018 14:56

sbiddle:

But it doesn't introduce a level playing field.

Importing a pair of shoes and clothing that costs over roughly NZ$230 currently incurs GST and duty on those goods, and as that puts the de minimis over $60 you also have to pay the IETF fee meaning you pay an extra NZ$113.62 on top of the NZ$230

With this change you'll only have to pay GST, meaning you'll only pay an extra $37.95 and save yourself $75.67 over what you'll pay now.

A retailer importing clothing and shoes for sale has to pay both duty and GST on the imported goods, as well as apportioning the IETF fees across the total cost of their goods.

Is the Duty disappearing?

Won't it then disappear for the big importers too then?

As for me, if the IETF/Duty wasn't there, I wouldn't care about the GST, as it would still be a lot cheaper than buying here (and they'd have the sizes/colours that I want/need). SO long as the GST was easy to pay, and didn't add huge amounts of time to delivery.

sbiddle

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#2068724 6-Aug-2018 15:23

trig42:

sbiddle:

But it doesn't introduce a level playing field.

Importing a pair of shoes and clothing that costs over roughly NZ$230 currently incurs GST and duty on those goods, and as that puts the de minimis over $60 you also have to pay the IETF fee meaning you pay an extra NZ$113.62 on top of the NZ$230

With this change you'll only have to pay GST, meaning you'll only pay an extra $37.95 and save yourself $75.67 over what you'll pay now.

A retailer importing clothing and shoes for sale has to pay both duty and GST on the imported goods, as well as apportioning the IETF fees across the total cost of their goods.

Is the Duty disappearing?

Won't it then disappear for the big importers too then?

As for me, if the IETF/Duty wasn't there, I wouldn't care about the GST, as it would still be a lot cheaper than buying here (and they'd have the sizes/colours that I want/need). SO long as the GST was easy to pay, and didn't add huge amounts of time to delivery.

Duty and IETF are being waived for purchases under $400 - so these imports will be cheaper than at present as you'll only pay 15% GST (rather than ~10% duty and 15% GST for a typical purchase) and also saves the IETF.

For imports over $400 you will still incur duty, and the IETF.

I fundamentally disagree with waiving the IETF for imports under $400 - the IETF fee exists because border security is funded by user pays. By waiving it for all imports under $400 it not only means people purchasing goods under $400 that would have previously uncured duty and the IETF save money, but the total cost of border security is now being funded by those who import goods over $400 - ie retailers who are now subsidising individuals.

tdgeek

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#2068734 6-Aug-2018 15:29

The idea was to catch GST on the growing numbers of small purchases, like the ones arriving at my place every other day. But yes, a bit more thought over the other charges would not have done any harm

Kyanar

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#2069268 7-Aug-2018 13:39

sbiddle:

I fundamentally disagree with waiving the IETF for imports under $400 - the IETF fee exists because border security is funded by user pays. By waiving it for all imports under $400 it not only means people purchasing goods under $400 that would have previously uncured duty and the IETF save money, but the total cost of border security is now being funded by those who import goods over $400 - ie retailers who are now subsidising individuals.

Then you should fundamentally disagree with charging GST on imports under $400, since the de minimis threshold is intentionally set at the point where collecting the payment costs so much it exceeds the amount collected. The only reason GST is now being collected on imports under the low value threshold is because retailers cried about it, so the government essentially decided that the taxpayers should subsidise retailers by paying to collect an uneconomic tax on low value imports. So you'll forgive me if I have no sympathy for retailers ending up subsidising these low value imports through the IETF. They expected every other taxpayer to do so - guess it backfired on them.

JimmyH

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#2071479 10-Aug-2018 18:24

Kyanar:

sbiddle:

I fundamentally disagree with waiving the IETF for imports under $400 - the IETF fee exists because border security is funded by user pays. By waiving it for all imports under $400 it not only means people purchasing goods under $400 that would have previously uncured duty and the IETF save money, but the total cost of border security is now being funded by those who import goods over $400 - ie retailers who are now subsidising individuals.

Then you should fundamentally disagree with charging GST on imports under $400, since the de minimis threshold is intentionally set at the point where collecting the payment costs so much it exceeds the amount collected. The only reason GST is now being collected on imports under the low value threshold is because retailers cried about it, so the government essentially decided that the taxpayers should subsidise retailers by paying to collect an uneconomic tax on low value imports. So you'll forgive me if I have no sympathy for retailers ending up subsidising these low value imports through the IETF. They expected every other taxpayer to do so - guess it backfired on them.

Exactly.

How does the government collecting (say) $40 in duties/fees help anyone, if it costs the government (say) $50+ to collect it?

This doesn't help the other retailers who you think are subsidising others. In fact, they would probably have to pay more. In a user-pays system the fee charged actually would have to rise for them, to cover the loss the system was now incurring because of of the hundreds of thousands of extra fees the government was now collecting - and losing money on each one of them.

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