Government planning changes to GST levy on overseas purchases

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1734 posts

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#853750 11-Jul-2013 10:56

It's not level and quite complex.

People flying back has a $750 limit right excl certain stuff, but mail is $400. I can understand exclusions for things like clothes and things like that, a half empty bottle of perfume etc but one could buy stuff overseas and declare up to $750 if they fly back but it is only $400 thru the mail. Another thing is if one have been living overseas and just sent their stuff back thru the mail like a old laptop and they might be hit with tax. What about a some used clothes like maybe 2 suits, a dress coat ..... You don't want to lose them so you insure them and that's over $400.

plas

453 posts

Ultimate Geek

#853754 11-Jul-2013 11:04

ilovemusic: Williamson has always been an idiot.

This just confirms it.

He seems to have a decent enough grasp of the situation, Retailers Association on the other hand.

Customs Minister Maurice Williamson says it would be virtually impossible to charge GST on items being bought online, an idea currently being explored by government officials.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10896770

Edit: Too Slow :)

robjg63

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#853770 11-Jul-2013 11:27

While I have bought the odd purchase from overseas websites in the past - and enjoyed the lower pricing, the issue is that as this trend continues there will be more pressure on government to do something about it. Quite what they can actually do about it though, I dont really know.

When you look at the price of some items sourced from overseas compared to the NZ sourced ones you do wonder if we are being royally screwed by the distributors (even taking GST out of the equation).

The NZ businesses cant compete on an even footing with goods that have 15% removed from the price and apparent cheaper retail cost outside of New Zealand - I dont blame then for being upset.

I suppose if the trend continues the government starts to miss out on more tax revenue them we may face income tax increases - thats about the only way they could resolve the issue. GST was ok when it could be rigidly enforced but now it cant. The other part of the equation is more NZ businesses will go to the wall.

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jarledb

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#853773 11-Jul-2013 11:34

One thing you need to take into consideration when looking at prices in for example the US and NZ is that the consumer rules in NZ is much stricter. The importer and retailers have a much tougher time with warranty issues in NZ than in the US.

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minimoke

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Ultimate Geek

#853834 11-Jul-2013 13:06

jarledb: One thing you need to take into consideration when looking at prices in for example the US and NZ is that the consumer rules in NZ is much stricter. The importer and retailers have a much tougher time with warranty issues in NZ than in the US.

Agree!. NZ retailers have one significant unique selling point over foreign retailers. And that is the Consumer Guarantee Act. But do we hear them marketing this advantage – not a word. Instead they prefer to flog Extended Warranties .

The other major advantage they ought to have is local specialist knowledge. But how much knowledge does it take to sell a book or DVD. In fact the last time I went to buy a DVD at Marbecks the item was showing up in their catalogue as available in Christchurch. But it wasn’t on the shelf when I went to the store. The ditsy shopkeeper made no offer to order it in for me so that was a lost sale. As for the minimum wagers in box stores, lets say no more!.

Retail is an evolving industry and it needs to move with the shift towards a global village. Part of that shift advantages those that retail NZ made products – they should be looking at selling offshore and I’m sure, say for example, they wouldn’t like to see their price increase by the VAT amount to a sale in the UK.

I am also unsure how NZ retail can expect patch protection for things they don’t sell. The last thing I bought was a Kindle Paperwhite. It wasn’t available in NZ. If the govt has an economic way of collecting GST then I would have been happy to pay it.

NZ also has to learn about product support. Support ought not to end when the sale is made. When I contacted Amazon about removing the ads it was done in a few minutes. Fast, easy , efficient. I hear the Warehouse is similar – if you have a problem they fix it pretty quick. If I get something from Noel Leeming for example I just know I am in for a battle if anything goes wrong – well that’s my experience after buying a laptop off them. I suspect that is what you get from commission driven sales people.

khull

1245 posts

Uber Geek

#853836 11-Jul-2013 13:12

All in all I'd much rather he give speeches about big gay rainbows instead of trying to make a fuss with smart arse comments

Klipspringer

2385 posts

Uber Geek
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#853846 11-Jul-2013 13:32

Online GST - Virtually impossible

Customs Minister Maurice Williamson says it would be virtually impossible to charge GST on items being bought online

The credit card GST purchase would be silly.

How would they tell the difference between online payments? And physical payments. Ie. When holidaying out of of the country and using my NZ credit card?

Also, there will be nothing stopping me from using a Non NZ credit card.

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macuser

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Uber Geek

#853903 11-Jul-2013 14:24

The only reason I buy from local stores is that I'm more likely to get a positive outcome if it breaks, but for me that is a pretty strong reason, so I will buy locally unless there is a major discrepancy in price or it isn't available.

I don't think retailers are doing much for themselves. Every time I walk into a store I feel harassed by the sales people, or they are no where to be found. The product I want isn't a Dick Smith TV, or a Noel Leeming Radio, it's a Canon camera or a Samsung phone, so the only thing that really separates them and the store selling it overseas is the price and warranty.

It would be good if they acted like a great place to buy things, rather than an annoying middleman.

surfisup1000

5288 posts

Uber Geek

#853909 11-Jul-2013 14:31

I don't think this will happen now -- the govt is distancing themselves from this very quickly.

They should concentrate on interest free student loans and deconstruction of Working for families --- These were blatant election bribes made by helen clark and of greater importance. Also, raising of the pension age has to be addressed now people live longer than ever. It is nonsustainable at 65 (and, the greeks found that 50 was also non sustainable).

Instead the govt nitpicks at little issues, maybe a sign of a govt in decline? IF only the opposition were not so woeful.

ajobbins

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#853915 11-Jul-2013 14:39

macuser: The only reason I buy from local stores is that I'm more likely to get a positive outcome if it breaks, but for me that is a pretty strong reason, so I will buy locally unless there is a major discrepancy in price or it isn't available.

Exactly. The ability to walk into a shop and walk out with a product, without having to wait for (And often pay for) shipping is often an advantage, along with the knowledge you are protected by local laws like the FTA and CGA and have strong recourse options if there is a problem.

I'll usually pay a 20-25% premium to buy locally with the above. While adding GST would probably reduce that gap, there would still be plenty of stuff from overseas that was significantly cheaper.

Wouldn't a better option be to reduce or remove GST altogether, and increase income tax rates instead?

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#853923 11-Jul-2013 14:48

If you have a Twitter account go to http://www.adoptanmp.co.nz/ and send this to your MP:

"If local retailers fought hard to get lower prices instead of increasing GST in personal imports we would be a lot better"

I am sending this to everyone in that list.

ubergeeknz

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Vocus

#853933 11-Jul-2013 15:00

ajobbins:
macuser: The only reason I buy from local stores is that I'm more likely to get a positive outcome if it breaks, but for me that is a pretty strong reason, so I will buy locally unless there is a major discrepancy in price or it isn't available.

Exactly. The ability to walk into a shop and walk out with a product, without having to wait for (And often pay for) shipping is often an advantage, along with the knowledge you are protected by local laws like the FTA and CGA and have strong recourse options if there is a problem.

I'll usually pay a 20-25% premium to buy locally with the above. While adding GST would probably reduce that gap, there would still be plenty of stuff from overseas that was significantly cheaper.

Wouldn't a better option be to reduce or remove GST altogether, and increase income tax rates instead?

I'm with you on getting rid of GST. With the rise in online purchasing and therefore personal importation, I think it's really had it's day, aside from all the other problems with taxing on purchases.

Jarno

270 posts

Ultimate Geek

#853939 11-Jul-2013 15:15

Klipspringer:

How would they tell the difference between online payments? And physical payments. Ie. When holidaying out of of the country and using my NZ credit card?

Or between a payment for a physical good from overseas (e.g. a boxed copy of SuperDuperSoftwarePro v14 via Amazon), and a payment for a download from overseas (e.g. the digital download version of SuperDuperSoftwarePro v14 via Amazon)? The latter is exempt from GST.

TwoSeven

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#854048 11-Jul-2013 18:40

Does a shop have to pay 15% import tax on things they bring in. If that is the case wouldn't it be better for the government to remove that import tariff so that the shops can compete on a level playing field ?

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sleemanj

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#854053 11-Jul-2013 18:50

TwoSeven: Does a shop have to pay 15% import tax on things they bring in. If that is the case wouldn't it be better for the government to remove that import tariff so that the shops can compete on a level playing field ?

Seems like you're not really familiar with how GST work, this isn't really the right thread to be telling you but in short you can think of it as vendors do not pay GST, but they must charge it to consumers, the GST charged gets given to the government.

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