Overseas Purchasing - GST Threshold about to be reduced

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649 posts

Ultimate Geek

#1359113 5-Aug-2015 09:46

Kyanar:
JimmyH:
Part of the problem is that I doubt there will be any extra revenue to do anything with. In fact, there may even be a substantial (net) loss of revenue. The current threshold for tax collection was set at $60 (=$400 purchase price when no tariffs are involved) for a good reason -- because collecting tax below that amount costs more to collect than they get.

If they try to collect GST on $20 purchases like the aussies are mooting then when I import a $20 item they will need to be able to intercept it, check the value, securely warehouse it, invoice me, collect the payment from me, and then speedily release the item. In return for which they collect the princely sum of $3 (=$20 x 15%). I can't see that $3 remotely covering the costs they will incur in getting it.

That's $3 plus $47 biosecurity levy, plus $46 customs broker fees, actually. Net result is that you will pay more in fees than the product cost - literally.

We don't know if the biosec and broker fees will be charged for low value items. They may well be exempted for low-value items that have a low risk profile. I suspect the government would throw the consumer a bone on that one.

MikeAqua

7785 posts

Uber Geek

#1359121 5-Aug-2015 10:11

I try and support local retailers where I need immediate purchase or expert advice, but sometimes it's hard work.

There are wins though. Last week I bought a quality pair of binoculars from a local retailer for $150.

If you really want to get ripped off consider buying an outboard engine in NZ!!

Mike

richms

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#1359154 5-Aug-2015 10:49

MikeAqua: I try and support local retailers where I need immediate purchase or expert advice, but sometimes it's hard work.

I know. So few local sellers get online. Warehouse is a prime example of terrible online sales. Hopeless mobile site and they say to use the app. But they make an app which lacks the most basic of features like zooming a photo or viewing what category your search result is it. They take forever to ship and give no useful tracking information till after you have it in most cases.

Compare to mightyape. Constantly quick dispatch and a much more useful website on both mobile and desktop.

Trademe is and other place where mediocrity thrives with the added disinestive to call the sellers out on it because they just retaliate.

If the local retailers think that amazon and aliexpress are my #1 and 2 places to spend because of gst they are delusional.

And the sad thing is when you work at a place with terrible customer service and Web presence you get no support for improving because it's "better than the competitions website".

Richard rich.ms

Kyanar

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#1359157 5-Aug-2015 10:57

wsnz:
We don't know if the biosec and broker fees will be charged for low value items. They may well be exempted for low-value items that have a low risk profile. I suspect the government would throw the consumer a bone on that one.

Ultimately though, it's not the government who's going to make that call. Let's be honest, they're doing this because of lobbying from The Warehouses, Harvey Normans, and Shoe Clinics of the country. And those guys aren't going to be willing to give the consumer a bone (unless you mean upside the head - because that's what they're giving you).

Kyanar

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#1359159 5-Aug-2015 10:59

richms:

If the local retailers think that amazon and aliexpress are my #1 and 2 places to spend because of gst they are delusional.

And the sad thing is when you work at a place with terrible customer service and Web presence you get no support for improving because it's "better than the competitions website".

Hint that that truth. So many places with terrible websites that actively make it hard to give them money. It's worse here in Australia where that dumb idea originates. Honestly, the best websites tend to be those of companies that thrive on people actively avoiding their stores (adult shops and the like)!

frankv

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#1359245 5-Aug-2015 12:15

JimmyH:
Part of the problem is that I doubt there will be any extra revenue to do anything with. In fact, there may even be a substantial (net) loss of revenue. The current threshold for tax collection was set at $60 (=$400 purchase price when no tariffs are involved) for a good reason -- because collecting tax below that amount costs more to collect than they get.

If they try to collect GST on $20 purchases like the aussies are mooting then when I import a $20 item they will need to be able to intercept it, check the value, securely warehouse it, invoice me, collect the payment from me, and then speedily release the item. In return for which they collect the princely sum of $3 (=$20 x 15%). I can't see that $3 remotely covering the costs they will incur in getting it.

I thought that the concept was that, like in NZ, the retailer would be required to collect the GST for the Govt as part of the purchase price, and periodically send consolidated lumps of cash to the Govt?

This works well (for the Govt) in NZ, where the Govt can force GST registration and has power over the retailer. I can imagine that it *might* work for big online US retailers like Amazon. But I think it would be a regulatory & enforcement nightmare. Most small online sellers wouldn't want to bother, and would refuse to ship to NZ. And I imagine that large amounts of GST would disappear into the pockets of shonky traders.

SepticSceptic

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#1359386 5-Aug-2015 13:49

MikeAqua:

If you really want to get ripped off consider buying an outboard engine in NZ!!

Aint that the truth !! Ditto fishfinders / chart plotters. The markup from factory to retailer is over 300%.

Quic Broadband

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Dulouz

883 posts

Ultimate Geek

#1359407 5-Aug-2015 14:19

If you really want to get ripped off consider buying an outboard engine in NZ!!

Or a chainsaw!

Amanon

richms

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#1359418 5-Aug-2015 14:21

Or a decent generator. Cant believe what they cost here vs the US.

Richard rich.ms

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#1359515 5-Aug-2015 16:21

richms: Or a decent generator. Cant believe what they cost here vs the US.

Or a car for that matter.

I suggested to my brother in the USA that he consider a VW Amarok. They don't sell them in the US, apparently.

After some searching, I found a forum where a VW dealer had advised an enquirer who had asked why he could not get an Amarok that they would not sell in the US because the fact that they are made in South America added some sort of additional tax which would make the purchase price about US $25,000 and "no one would pay that" for one.

That is the equivalent of NZ$38,000. Retail here is between $45,000 and $65,000......

wsnz

649 posts

Ultimate Geek

#1359624 5-Aug-2015 19:32

frankv:

I thought that the concept was that, like in NZ, the retailer would be required to collect the GST for the Govt as part of the purchase price, and periodically send consolidated lumps of cash to the Govt?

This works well (for the Govt) in NZ, where the Govt can force GST registration and has power over the retailer. I can imagine that it *might* work for big online US retailers like Amazon. But I think it would be a regulatory & enforcement nightmare. Most small online sellers wouldn't want to bother, and would refuse to ship to NZ. And I imagine that large amounts of GST would disappear into the pockets of shonky traders.

Yes, you're right.

The concept that has been alluded to so far is that larger retailers would be required to register for GST (e.g. Amazon, Netflix etc.), while smaller retailers would not (e.g. Bob's T-Shirts of BC). Customs would collect GST (and any associated levies) from importers of the smaller physical items, and police physical packages arriving from the larger retailers. Virtual goods presumably (and I have not heard anything about this specifically) would align with the existing taxation honesty system.

There are so many regulatory and enforcement related issues associated with this, it is hard to imagine how this will be implemented effectively, let alone cost-effectively!

IMO, alignment with the policies of our existing trading partners, pressure from local lobbyists and probable conditions with the TPP agreements will unfortunately in all likelihood, force the implementation.

mattwnz

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#1359627 5-Aug-2015 19:49

I a wondering how they would get overseas services like Netflix for example, to charge GST to their NZ customer base, as it is online services that are adversly affects just as much as local physical retailers. At the moment it looks like it will only affect things which physically cross the border.

shk292

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#1359640 5-Aug-2015 20:13

What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST? I can see a business niche for an "aunt" service

sleemanj

1490 posts

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#1359649 5-Aug-2015 20:36

shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

---
James Sleeman
I sell lots of stuff for electronic enthusiasts...

richms

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#1359663 5-Aug-2015 20:52

Yeah but most of the China gifts are $10 accessories or hobby parts despite costing way less or more.

Richard rich.ms

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