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Topic # 115310 21-Mar-2013 10:36
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Casually on Stuff, i came across this article

T
he 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?

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  Reply # 784858 21-Mar-2013 10:58
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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.

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  Reply # 784860 21-Mar-2013 10:59
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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.




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  Reply # 784862 21-Mar-2013 11:01
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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?


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  Reply # 784866 21-Mar-2013 11:03
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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.




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  Reply # 784867 21-Mar-2013 11:04
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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...

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  Reply # 784868 21-Mar-2013 11:05
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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

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  Reply # 784869 21-Mar-2013 11:05
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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.

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  Reply # 784870 21-Mar-2013 11:08
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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

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  Reply # 784873 21-Mar-2013 11:17
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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?

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  Reply # 784880 21-Mar-2013 11:34
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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. 

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  Reply # 784882 21-Mar-2013 11:38
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Well they could add GST on mail order items on the CC ... maybe GST and duties if they see GST isn't substantial enof.

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  Reply # 784883 21-Mar-2013 11:38
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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).

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  Reply # 784893 21-Mar-2013 11:50
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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.





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  Reply # 784947 21-Mar-2013 13:31
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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?

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  Reply # 784948 21-Mar-2013 13:31
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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.

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