GST to be charged on purchases below $400

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#2005807 1-May-2018 11:03

timmmay:

Stuff says "That would see import duty and biosecurity fees on low value goods axed, softening the blow for consumers.".

I'm confused, we currently don't pay these fees on low value imports anyway. They aren't axing anything, are they?

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#2005810 1-May-2018 11:03

KrazyKid:

Couple of interesting facts I have found reading about this over morning tea:

1) Labour has promised not to introduce "new" taxes in its first term of government, but former revenue spokesman Michael Wood made it clear before the election that did not rule out it extending GST to overseas purchases.

2) A Cabinet paper prepared by the former National government, which was released by Nash under the Official Information Act in February, also suggested introducing the Amazon tax in October next year.

And? Its not a new tax, GST is an old tax. Its just adding it to those that should have been charging it but havent been.

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#2005811 1-May-2018 11:04

Fred99:

The GST threshold was set at a level below which it was determined that cost of collection exceeded the return, so I don't go along with claims these changes are "revenue gathering" if the fact is they're actually "revenue losing".

They are "revenue gathering" as the meaning of revenue does not include the concept of subtracting costs.

Income, turnover and sales are similar terms that also do not include the subtraction of costs.

Some terms like earnings normally have no costs subtracted but can be used both ways.

Then we have the many terms that include the subtraction of costs: net earnings, net income, gross profit, net profit, NPBITD, etc

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#2005812 1-May-2018 11:05

tdgeek:

KrazyKid:

Couple of interesting facts I have found reading about this over morning tea:

1) Labour has promised not to introduce "new" taxes in its first term of government, but former revenue spokesman Michael Wood made it clear before the election that did not rule out it extending GST to overseas purchases.

2) A Cabinet paper prepared by the former National government, which was released by Nash under the Official Information Act in February, also suggested introducing the Amazon tax in October next year.

And? Its not a new tax, GST is an old tax. Its just adding it to those that should have been charging it but havent been.

Rubbish!

I can't make this any more simple:

Was is there before the election? No. Is it here now? Yes. Then it's a NEW tax.

End of Story.

Everything else is just word games and Semantics. Doesn't matter if National was also going to do it, they didn't campaign on no new taxes. Doesn't matter if it's making the system fairer, that just means you may or may not resent it as well. It's still money that wasn't being collected before.

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#2005815 1-May-2018 11:09

Fred99:

sbiddle:

How is it fair that IETF and processing fees are slashed on goods under $400 but that you'll have to pay over $400?

I didn't think that IETF was payable in that case (under $400 in most cases) anyway.

It wasn't because the IETF fees (and then the biosecurity fee on top) was only collected when GST was collected, simply because it was not cost effective to charge it otherwise.

My issue is that IEFT (and the biosecurity fee) are user pays fees based on the total cost of performing risk assessments and processing of imported goods. Everybody importing something has to pay this but it's simply not charged on goods that fall below the de minimis value.

I don't see how it's fair that a $399 product that will now incur duty and/or GST will be exempt from this, but a $401 product that has always incurred GST and/or duty will still continue to pay those same fees. They are fees that should be paid by everybody, and if they were would subsequently reduced in value for everybody paying them.

robjg63

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#2005819 1-May-2018 11:12

Its just a glaring loophole that is finally being closed.

The previous government was wanting to close that loophole as well.

Tax works well when everybody pays their share.

You will just have to pay 15% more for your toys.

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#2005821 1-May-2018 11:17

I don't have a problem paying 15% GST on stuff purchased from overseas websites. There has been a lot of comment on this over the years and I really don't understand how those that say "it's stupid because I buy stuff from overseas that you can't get here". Great. You can still get it, you will just pay tax on it. It might even encourage local retailers to stock things, since they won't be giving up a 15% head start on pricing.

I will still buy from retailers/supplier that I trust and have the lowest total cost of purchase: purchase price + tax + shipping + (ease of returns * likelihood of returns). For some things, I far prefer buying local for warranty support and returns etc. For others, I don't have a problem buying from overseas.

What *really* annoys me is the $60 odd customs duty that is either all or nothing. Under the new rules, the worst amount to spend from something overseas will be around $400 (including shipping), as you will be paying an effective tax rate of ~30%: ($60 + $400 * 0.15) / 400 * 100/1. Bringing in $4 grand of stuff? 16.5% effective tax rate. And surely if you are a wholesaler bringing in 1000 boxes of product X, that has to have higher inspection costs than me privately buying a single box of the same product.

I think it would be far more equitable to charge (say) a 1% fee on everything for border processing, perhaps up to a maximum.

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#2005823 1-May-2018 11:19

mdf:

I think it would be far more equitable to charge (say) a 1% fee on everything for border processing, perhaps up to a maximum.

This *would* be much fairer.

MikeB4

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#2005824 1-May-2018 11:21

networkn:

tdgeek:

KrazyKid:

Couple of interesting facts I have found reading about this over morning tea:

1) Labour has promised not to introduce "new" taxes in its first term of government, but former revenue spokesman Michael Wood made it clear before the election that did not rule out it extending GST to overseas purchases.

2) A Cabinet paper prepared by the former National government, which was released by Nash under the Official Information Act in February, also suggested introducing the Amazon tax in October next year.

And? Its not a new tax, GST is an old tax. Its just adding it to those that should have been charging it but havent been.

Rubbish!

I can't make this any more simple:

Was is there before the election? No. Is it here now? Yes. Then it's a NEW tax.

End of Story.

Everything else is just word games and Semantics. Doesn't matter if National was also going to do it, they didn't campaign on no new taxes. Doesn't matter if it's making the system fairer, that just means you may or may not resent it as well. It's still money that wasn't being collected before.

Unless we have all jumped in a Tardis and gone back to 30/09/1986 then it is a new tax. We haven't and the current date is post 01/10/1986 and GST is in force so this is no more a new tax than what is was when the then National Government increased to rate to 15%.

Here is a crazy notion, lets give peace a chance.

networkn

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#2005826 1-May-2018 11:23

They were not collecting it before, they are now. That's NEW. We didn't have to pay it before, and we do now, it's NEW.

tdgeek

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#2005831 1-May-2018 11:35

networkn:

tdgeek:

KrazyKid:

Couple of interesting facts I have found reading about this over morning tea:

1) Labour has promised not to introduce "new" taxes in its first term of government, but former revenue spokesman Michael Wood made it clear before the election that did not rule out it extending GST to overseas purchases.

2) A Cabinet paper prepared by the former National government, which was released by Nash under the Official Information Act in February, also suggested introducing the Amazon tax in October next year.

And? Its not a new tax, GST is an old tax. Its just adding it to those that should have been charging it but havent been.

Rubbish!

I can't make this any more simple:

Was is there before the election? No. Is it here now? Yes. Then it's a NEW tax.

End of Story.

Everything else is just word games and Semantics. Doesn't matter if National was also going to do it, they didn't campaign on no new taxes. Doesn't matter if it's making the system fairer, that just means you may or may not resent it as well. It's still money that wasn't being collected before.

No its not. GST is old. It should have been charged on overseas purchases but it was too hard, so it wasnt

RUC are not chargeable on EV's at the moment. They should be, they can be, but they aren't. When they are is that a new tax ??? No. Its a very close analogy, but it lacks the political swerve you are trying to put on it

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#2005835 1-May-2018 11:39

I see it this way. Government can collect it, but it costs more to collect then collected amount.

Government would like to push cost of collection to online retailers (big names only), give them account number for payments and that's it (well I guess they will do audit or somehow, total volume sales * 15% = tax).

I guess amazon, ebay, aliexpress, asos will play by the rules, but all the rest - meh. volume of sales is low to implement the required. NZ is small, and NO one gives a darn about it, if it's not MILK (China soon won't too) :(

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alexx

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#2005840 1-May-2018 11:43

old3eyes:

surfisup1000:

Coil:

I thought that Labour was not adding any further taxes along with a whole raft of other broken election promises lol.

Seems that only retails in partnership with customs or what ever will be charging this and I saw it quoted that the likes of a $40 book they won't bother because its costs more to collect on it than they make.

Revenue gathering through and throughout.

GST is not a new tax though. They are just starting to collect it where before it was too difficult. As long as they are not adding all those import duties etc, i don't see much of an issue.

GST is not a new tax but adding to to items under $400 is a new tax..

I just checked my Grocery bill and recent clothing receipts and paying GST on items under $400 is an existing tax.

I hope this change means that under the new rules, if I purchase something over $400 it will mean I *just* pay the GST and no additional customs inspection fees or anything like that.

#include <standard.disclaimer>

evilengineer

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#2005841 1-May-2018 11:43

I don't understand all the "new tax" faux outrage aimed at the new government.

National had been flagging this as coming down the track for at least 2 years.

You'd still be getting this "new tax" regardless of whether Red or Blue was in charge.

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#2005846 1-May-2018 11:50

If you sell over 60k you need to be registered. But the overseas sellers has always been difficult to put in place. There is no exemption if you are an overseas seller, its just been to hard. Now its not too hard, so the GST that they have always been required to collect, but has not been attended to, has now been attended to. Who has attended to, as you say, isn't relevant. The smaller overseas sellers that turn up at my door from my teenager, some are lucky enough to avoid it, as that's still too hard. Under the GST statute they are due to collect it, but there is no mechanism to assess their NZ sales if they are over 60k, so they are lucky enough to get off it. If the mechanism was put in place it would be too costly, so lucky them. No new tax to see here, just an effort to enforce the tax that already existed for them

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