Retailers Trying to End Overseas GST Free Purchases

Forums › Off topic › Retailers Trying to End Overseas GST Free Purchases

Krishant007

1369 posts

Uber Geek
+1 received by user: 70

Topic # 115310 21-Mar-2013 10:36

Casually on Stuff, i came across this article

The article states that retailers are trying to close the loophole where the government reduces the $400 threshold for overseas purchases that we get shipped.

Basically, a lot of people have been purchasing things from overseas and using services such as youshop to get it shipped to nzl. If the purchase is less than $400 nzd, we dont get charged GST in customs. Now I feel that this is good enough - if anything, i feel the threshold should be higher since it can give the local retailers more of a competition to lower their prices for the consumer.

But the retailers are trying to close this loophole which will hurt the end consumers - quite a bit for the tech savvy people i reckon.

Any thoughts anyone would like to share?

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8

1469 posts

Uber Geek
+1 received by user: 134

Subscriber

Reply # 784858 21-Mar-2013 10:58

Cue the arguements for growing the local economy.

+1 for growing the economy... buy local and if we all buy local then the volume will naturally in time lower prices.

timmmay

13749 posts

Uber Geek
+1 received by user: 2392

Trusted

Subscriber

Reply # 784860 21-Mar-2013 10:59

It's not a loophole, it's on purpose, to prevent overwhelming customs with very low value packages than bring less revenue than the cost of administration.

Of course NZ retailers want to stop people buying elsewhere. Many things are hugely overpriced, they want their margins and the margins for the middlemen, and they want it more difficult or expensive to buy from overseas.

Shoes I wear that cost $300 in NZ cost $120 on amazon. Even with shipping and adding GST (if that happens) they're still much cheaper overseas. If I try something on in a store and want to buy it, I buy it there, since they took the risk of buying stock and giving me service. After the initial purchase I buy online if I need more.

AWS Certified Solution Architect Professional, Sysop Administrator Associate, and Developer Associate
TOGAF certified enterprise architect
Professional photographer

Try Wrike: fast, easy, and efficient project collaboration software

surfisup1000

3467 posts

Uber Geek
+1 received by user: 1061

Reply # 784862 21-Mar-2013 11:01

My thoughts from a purely balancing the books perspective.

This is costing 300 million a year in lost tax.

So, assuming govt spending stays the same or grows, where does the government raise the lost 300 million?

Tax on carparks/laptops etc?

timmmay

13749 posts

Uber Geek
+1 received by user: 2392

Trusted

Subscriber

Reply # 784866 21-Mar-2013 11:03

It's a theoretical $300M in lost tax. If people can't get things cheaper they may not buy them. Also the cost of collecting that $300M may be $200M.

AWS Certified Solution Architect Professional, Sysop Administrator Associate, and Developer Associate
TOGAF certified enterprise architect
Professional photographer

ubergeeknz

Fully Operational
3343 posts

Uber Geek
+1 received by user: 1088

Trusted

Vocus

Subscriber

Reply # 784867 21-Mar-2013 11:04

surfisup1000: This is costing 300 million a year in lost tax.

There are 2 billion dollars worth of packages coming in a year with value under $400? Doesn't seem right to me...

Talkiet

3474 posts

Uber Geek
+1 received by user: 1912

Trusted

Spark NZ

Reply # 784868 21-Mar-2013 11:05

One person supports this post

I think it will suck for me if they close the loophole or reduce the threshold.

I think it's the right thing to do however as clearly this is disadvantaging local retailers and is hurting tax take.

Cheers - N

Kyanar

2942 posts

Uber Geek
+1 received by user: 434

Trusted

Subscriber

Reply # 784869 21-Mar-2013 11:05

And if all else fails, a quick email and PayPal payment to a friend on The Other Side and just get it sent over as a gift tax free. Pretty pointless exercise, really.

nickb800

1874 posts

Uber Geek
+1 received by user: 262

Trusted

Reply # 784870 21-Mar-2013 11:08

timmmay: It's not a loophole, it's on purpose, to prevent overwhelming customs with very low value packages than bring less revenue than the cost of administration.
.

This.

Lowering the threshold would result in grossly inefficient tax collection where the administration costs are a similar value to the tax being collected.

Not to mention the delay in shipment while you are notified, then pay, then the goods are released to you if you have ordered from a foreign retailer that doesnt collect GST on behalf of our govt (likely for any retailer except perhaps the largest e.g Amazon)

Booksellers need to evolve

rayonline

1417 posts

Uber Geek
+1 received by user: 34

Reply # 784873 21-Mar-2013 11:17

There is too much work for customs if they were to tax all stuff or to drop the $400 figure. If I buy a $25NZ book are they gonna write to me and hold the item in storage until I pay ..... But given the prices, if they were to tax everything above $0.00 I would still import them before the markup in NZ is just crazy. We're talking about 120% markup here. 15% GST is nothing.

Then we can get eBooks or are they gonna tax credit/debit card users as well those that are made over the net?

surfisup1000

3467 posts

Uber Geek
+1 received by user: 1061

Reply # 784880 21-Mar-2013 11:34

rayonline: There is too much work for customs

Why do you think customs will collect? This is not how they do it in other countries that charge for small value imports.

You buy something from amazon for example, and you get a 'notification' in the mail to say the goods have arrived at the nearest post office.

So, you visit the post office, pay the gst on declared value , and collect your goods. It really is very efficient. If anything, it is better that customs do not collect GST as it creates unnecessary delays.

But, personally, I hope they do not do this.

rayonline

1417 posts

Uber Geek
+1 received by user: 34

Reply # 784882 21-Mar-2013 11:38

Well they could add GST on mail order items on the CC ... maybe GST and duties if they see GST isn't substantial enof.

Kyanar

2942 posts

Uber Geek
+1 received by user: 434

Trusted

Subscriber

Reply # 784883 21-Mar-2013 11:38

surfisup1000:
rayonline: There is too much work for customs

Why do you think customs will collect? This is not how they do it in other countries that charge for small value imports.

You buy something from amazon for example, and you get a 'notification' in the mail to say the goods have arrived at the nearest post office.

So, you visit the post office, pay the gst on declared value , and collect your goods. It really is very efficient. If anything, it is better that customs do not collect GST as it creates unnecessary delays.

But, personally, I hope they do not do this.

Amazon's a poor example, as they already collect and pay the GST and duty for you if you purchase from them (seriously - try it sometime. If you buy something that triggers the customs threshold, Amazon will actually add the taxes to the purchase, and pay it for you. If it comes out to more than Amazon estimated, they pay the difference, and if it comes out to less then Amazon will refund the difference).

CYaBro

2886 posts

Uber Geek
+1 received by user: 269

Reply # 784893 21-Mar-2013 11:50

I think they should leave the threshold as it is at $400.
What they should do though is get better at stopping everything that is over the $400 value to make sure they aren't missing out on GST on those packages.
I know many people, myself included, that have imported stuff well over the $400 dollar limit and didn't have to pay the GST.

Computer Repairs Whangarei
Apple Authorised Reseller
Apple Authorised Service Provider

gzt

9600 posts

Uber Geek
+1 received by user: 1407

Reply # 784947 21-Mar-2013 13:31

It is the way we do tax in nz so I would not mind paying if it was practical. What exactly is being proposed in this case? Seize and delay everything does not seem practical. It is annoying enough when it happens to something over that value. Btw, what is the correct way to deal with that and avoid delays?

sbiddle

26227 posts

Uber Geek
+1 received by user: 5807

Moderator

Trusted

Biddle Corp

Lifetime subscriber

Reply # 784948 21-Mar-2013 13:31

I'm sum it up with pretty much the same attitute that most people in Australia have, where retailers are pushing the same agenda but Aussie has a $1000 limit. Over there people are pretty much saying it won't make any difference, even with the Government collecting GST the price difference is so great it won't do anything to stop importing goods.

You could argue here that many of the big savings made are on goods over $400 where GST is currently charged.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8