Kyanar: The idea that we should have to pay GST on imports at all is just a form of protectionism. You know what would stop people importing so much stuff? If the local prices weren't bloody ridiculously high.
One could argue that GST on goods for personal use is just that. For business use it's a totally different issue. GST paid by a business is cancelled out when GST is charged on those goods that are resold. If a company didn't pay GST on those goods there would be a significant exploit in the system.
There is no way to assess whether imported goods are for personal or business use (ie being resold) so the fairest way is to charge GST on all goods. If personal goods were not subject to this businesses would simply rort the system.
I would disagree GST on goods for personal use is protectionism well presuming you're talking about protecting local businesses. One (emphasis here for a reason, it isn't the only one my any stretch) of the reasons why local prices are ridicilous is because the businesses are actually collecting GST, and duties where applicable.
And that's an important point. Do remember of course if you are buying items or services in NZ you do pay GST for nearly everything (a few things are zero rated and you can claim it back in a fashion of you are a business). GST isn't intended to let you off because it's for personal use, quite the opposite in fact GST is ultimately targetted at the end user.
GST is a consumption tax. Whatever the merits of such a tax (and this really isn't the place to discuss that), it's by definition intended to tax consumption. From the governments POV, whether you are buying the items locally or importing them you're still consuming and they want to tax your local consumption (and yes importing goods for NZ use is local consumption). In an ideal world, I'm sure they would like to tax for all imported goods. But they don't consider it cost effective so they've introduced a $50 revenue cut off point where they don't bother. In fact in much of the EU, from what I've read they're far stricter, VAT is commonly collected even on cheap DealExtreme imports (although I don't believe they charge much or perhaps any fee).
In other words, the primary thing the government wants to protect is their income. They probably care a bit about local business too, but that isn't likely to be their raison d'être. All recent NZ Governments and the people in government (i.e. the civil service) have been fairly 'free trade' anyway, they haven't been particularly concerned with protecting local business via what they consider artificial means. From their general POV, If you can get things for cheaper from overseas because local businesses are too expensive, then the local business need to find some way to adapt in their opinion. Of course when one of the reasons you can get things so cheap is because you are avoiding paying a tax you should be paying, well then it's hardly surprising they do care a bit although as I've said I suspect they care more about the 'tax avoidance' (something they always dislike) component then the 'local business' one. (But if they were really interested in protectionism, don't you think they would actually collect on most goods like they do in much of the EU even if it isn't cost effective?)
Some of the earlier posts are to but it mildly, confused. The government doesn't tax GST because of services they provide to businesses or services they provide to get you the product or whatever. Government services in relation to the product (or you getting it) have nothing to do with it! Do some people still think it's called the government service tax? Because it isn't. An the only relevance of a burden on customs is it means they shouldn't charge any customs handling fee. GST (and duties if applicable) still apply since burden on customs have nothing to do with them.
GST is really just another general revenue tax, i.e. to provide money for the government to do whatever they do like provide health care, that as I've said is targeted at consumption in the form commonly called a value added tax. I also don't get why software being a service would change anything. It's called a GST for a reason, because it's a tax on goods and services. The fact that the person providing the service overseas is not likely to make a difference in their minds if it's effectively being 'consumed' locally, and I doubt the OECD says any different (I'm pretty sure the EU has already convinced most large companies to charge VAT to EU residents even for software or whatever other 'service', wherever the company is located, their large size makes that a lot easier for them of course.)
Nil Einne: The fact that the person providing the service overseas is not likely to make a difference in their minds if it's effectively being 'consumed' locally, and I doubt the OECD says any different (I'm pretty sure the EU has already convinced most large companies to charge VAT to EU residents even for software or whatever other 'service', wherever the company is located, their large size makes that a lot easier for them of course.)
This is the IRD position "We follow the OECD decision of treating products digitally supplied as services.
If software is downloaded directly from an overseas supplier on the internet, it may be noted that the customer acquires data in the form of a digital signal and doesn't obtain the copyright. None the less, that data constitutes services for GST purposes. This is treated as an imported service not subject to GST. However, if the software was from a New Zealand supplier, GST would be charged."
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