GST etc on imports

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#961987 6-Jan-2014 16:39

sbiddle:

How long till NZ ends up like Tesco - they were caught a few years ago shipping mail order goods such as CDs and DVDs from the UK to Switzerland where they could then post them back to the UK and claim VAT free status! This basically meant they could sell UK stock online for less than other retailers.

Not long, probably already happening in lots of niches.

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#961988 6-Jan-2014 16:39

The whole "We want GST on imports" thing is a big red herring / smoke screen for the simple fact that retail stores are over-priced ... whether that's the store's fault, the distributor's fault, the delivery company's fault, etc. is difficult to answer, but somewhere along the line, someone (or multiple someone's) are making large greedy profits at customers expense. Even if they do add GST to personal imports, why are most goods are still going to be cheaper to buy online overseas and ship here - that's the question someone in a postitioon to do something about it should be finding the answer to.

As well as the greed, there's the simple fact that many items simply are not stocked in retail stores. For example, with the closure or Dymocks and Borders, we're now stuck with almost only PaperPlus and Whitcoulls selling books, and neither ever gets the Star Wars novels in stock.

Ragnor

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#961996 6-Jan-2014 16:46

If buying overseas is still cheaper (due to economies of scale on wholesale purchasing and shipping) after GST is added, no problem buy from overseas.

old3eyes

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#961997 6-Jan-2014 16:47

freitasm: It is more a retail lobbying movement than a tax collection exercise. And people are falling for it.

And of course hyped up by the news media always trying to sensationalize everything..

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Old3eyes

JimmyH

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#962043 6-Jan-2014 18:19

Ragnor:
KiwiNZ:

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

Sales taxes are highly regressive (people on lower incomes pay a higher % of their income) so it depends on what you mean by fair? and there's a large IRD bureaucracy around collecting GST, plus the burden on businesses so it's not clear that it is cheaper or efficient if you look at the whole picture.

No, it is cheaper and more efficient. Cheaper in the sense that the administration costs for both the IRD and the people who have to comply with it are a lot less than other tax options - such as the convoluted sales tax mess it replaced. Efficient in the sense that it is a less behaviourally distortionary tax than most alternative options - such as income tax and the convoluted sales tax mess it replaced.

What you are talking about is equity. While it is a valid issue, it isn't the same thing as cost or efficiency when you discuss tax options.

JimmyH

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#962046 6-Jan-2014 18:25

Buzz Bumble: The whole "We want GST on imports" thing is a big red herring / smoke screen for the simple fact that retail stores are over-priced ... whether that's the store's fault, the distributor's fault, the delivery company's fault, etc. is difficult to answer, but somewhere along the line, someone (or multiple someone's) are making large greedy profits at customers expense. Even if they do add GST to personal imports, why are most goods are still going to be cheaper to buy online overseas and ship here - that's the question someone in a postitioon to do something about it should be finding the answer to.

As well as the greed, there's the simple fact that many items simply are not stocked in retail stores. For example, with the closure or Dymocks and Borders, we're now stuck with almost only PaperPlus and Whitcoulls selling books, and neither ever gets the Star Wars novels in stock.

Even the alleged GST-related pricing differential is pretty much red herring. NZ distributors/retailers gouge so outrageously that the cost saving from importing is usually many, many, many, times the difference imposing GST would make. What they want to do is massively ramp up the hassle factor of importing yourself - every small value shipment gets held by customs, they have to contact you, then you have to contact them and arrange payment, pay inspection and biosecurity fees on top of this, then it gets released. Basically, they want to impose as much extra hassle, costs and inconvenience as they possibly can.

The reason for this is that they want to make it so inconvenient to import personally that, for low to mid-priced items like a few books, it becomes the path of least resistance to just go to a local retailer, lie back, and contemplate England.

freitasm

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#962087 6-Jan-2014 19:42

KiwiNZ:
Ragnor:
Klipspringer:

Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

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#962115 6-Jan-2014 20:40

freitasm:
KiwiNZ:
Ragnor:
Klipspringer:

Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

If it were not for GST the PAYE would be considerably higher. GST is payable by visitors to NZ that don't pay income tax here but use our roads etc.

One cannot reduce ones PAYE but can reduce the GST paid by saving more and spending less.

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#962188 6-Jan-2014 21:45

KiwiNZ:
freitasm:
KiwiNZ:
Ragnor:
Klipspringer:

Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

If it were not for GST the PAYE would be considerably higher. GST is payable by visitors to NZ that don't pay income tax here but use our roads etc.

One cannot reduce ones PAYE but can reduce the GST paid by saving more and spending less.

Also GST captures a bigger portion of the cash market. Pay your plumber under the table and no income tax is paid however if the plumber goes to the pub and buys a beer, GST is paid.

Geektastic

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#962260 7-Jan-2014 00:02

freitasm:
KiwiNZ:
Ragnor:
Klipspringer:

Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

I entirely agree. Don't ever work out the amount of tax on fuel and what the cost to you in gross earning is every time you fill up!!

I support GST as a method of ensuring everyone pays at least some tax. However income taxes etc should be reduced or abandoned. Taxing personal effort is foolish. Taxing consumption in the modern world is a better idea.

Linuxluver

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#962280 7-Jan-2014 07:26

sbiddle:
freitasm: Currently Customs waives the collection of GST under $60 ($400 goods including shipping).

The threshold is $60 which includes duty and GST. In the case with the OP the duty and GST put the value over $60, even if the goods are under the $400 threshold.

I've always thought this was interesting as they could simply charge a "Low-Value Imports processing Fee" to such items...and then add GST to the fee, the item and any other charges they want to lump onto it. Any such "fees" are effectively import duties (IMHO).

This way they would collect GST on everything...and make money doing it.

Bottom line: If I can't buy it locally, or the local guy is just a drop-shipper, then I'll import it myself.

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MikeB4

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#962281 7-Jan-2014 07:33

Geektastic:
freitasm:
KiwiNZ:
Ragnor:
Klipspringer:

Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer.

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

I entirely agree. Don't ever work out the amount of tax on fuel and what the cost to you in gross earning is every time you fill up!!

I support GST as a method of ensuring everyone pays at least some tax. However income taxes etc should be reduced or abandoned. Taxing personal effort is foolish. Taxing consumption in the modern world is a better idea.

Agreed indirect taxation is better as it has a lower avoidance rate. However for PAYE to be removed the rate of GST will have to be considerably higher.

As for fuel, from memory (maybe wrong) approximately $0.65c a litre goes to the Government

sbiddle

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#962292 7-Jan-2014 08:19

Lets go back a few steps and look at why the retail market in NZ is screwed - it's because of retailers like Kathmandu who pioneered the concept of selling large quantities of their stock at "50% off" by hiking up the everyday retail. People fell for this so the concept simply grew and we're now seeing the likes of Briscoes, Farmers etc all following.

We now have a mass market of people that won't buy something unless it's got a 50% off sticker on it which has basically resulted in a very screwed retail sector.

trig42

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#962295 7-Jan-2014 08:46

sbiddle: Lets go back a few steps and look at why the retail market in NZ is screwed - it's because of retailers like Kathmandu who pioneered the concept of selling large quantities of their stock at "50% off" by hiking up the everyday retail. People fell for this so the concept simply grew and we're now seeing the likes of Briscoes, Farmers etc all following.

We now have a mass market of people that won't buy something unless it's got a 50% off sticker on it which has basically resulted in a very screwed retail sector.

This.

Nearly all retailers are doing it. I now no longer am even interested when a Noels or Harvey Norman have 20% off Computers or TVs, because it's 20% off what??? Some ridiculously high price that no sane person would ever pay?

Same with Briscoes/Rebel Sport, why don't they just close their stores on days without a sale (is there such a day?)?

There are a couple of retailers that do have everyday low prices, or their % off sales are off already lowered prices (JB quite commonly do this).

MikeB4

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#962301 7-Jan-2014 09:00

sbiddle: Lets go back a few steps and look at why the retail market in NZ is screwed - it's because of retailers like Kathmandu who pioneered the concept of selling large quantities of their stock at "50% off" by hiking up the everyday retail. People fell for this so the concept simply grew and we're now seeing the likes of Briscoes, Farmers etc all following.

We now have a mass market of people that won't buy something unless it's got a 50% off sticker on it which has basically resulted in a very screwed retail sector.

That is partially a symptom another and I believe a more significant symptom, NZ is a very small market on the World stage, for most overseas manufacturers the sales here are merely a "rounding error". We therefore do not get the range of products and in many cases (HP springs to mind) we get the end of line products dumped on our market. As a result consumers that want a wider choice or newest products in many cases need to source off shore.

Another factor is the internet, buyers search the web for what they want and use the local retailers as a touch and feel showroom but make the purchases online.

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