I read in the NZ Herald about the new government making all overseas purchases have GST added. I read the whole article and it was typical lazy journalism - no mention of how it will be achieved. I thought I'd check in geekzone and maybe create a thread, but I found this thread so I'll participate here.
I don't mind paying GST on my discretionary overseas purchases if it creates a level playing field for local companies, plus contributes to fixing years of social neglect.
Ah, exactly my thought. The concept is fine, pay 15% GST on everything.
BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?
Yes, people shouldn't deliberately avoid tax, our government needs tax to pay for health, education, justice, social welfare, etc.
But how will it be done? When I buy something from China for NZ$2.90 with free international shipping - will I now pay GST? If so, then how?
My suggestion was that there is no way that we can have all offshore retailers being GST registered or forcing them to add GST to their foreign invoice and send the funds to the IRD. The banking system is one system that is intermediary, hence it will be common to almost everyone. if there was a way to tag NZ payments to offshore as for importing goods, to bill GST by the NZ paying bank. Just an idea. At least that is ONE system, whereas we cant get every overseas retailer to collect GST and send it to the IRD. On the surface it seems relatively clean
Going though the banks is hard, what if I'm on an overseas trip and the money I spend is on goods/services consumed in another country.
Going through the retailers could work well - at least for the goods/services sold by those particular retailers. If we are going this way then obviously it isn't all spending online, it would be all spending through certain major retailers like Amazon, Netflix, Apple, Android Play, etc. Is some random Ebay seller going to collect GST for the NZ government? I suspect not.
I buy from overseas for two main reasons:
1. I can't get the goods locally. As in no one here has them for sale, they aren't imported by anyone and retailed here. This is a very large chunk of my overseas spending.
2. Locally the prices are stupid! Some things are so ridiculous, like over twice the price in many cases. I bought a helmet that costs ~$650 here and the landed price from Germany was ~$350, I'd happily pay another 15% and still buy from overseas for this sort of price difference. $350 + $52.50 = $402.50 which is still cheaper than $650 if my maths isn't failing me.
3. To avoid GST. No wait, I said two reasons, not three. I never buy from overseas for this reason. If the NZ retailers were selling the same thing for only 15% more then I would buy locally.
Currently I'm looking at a hammock tarp from a cottage industry vendor in the US. This isn't sold here. Nothing remotely similar is sold here. Nothing that will do the same job is sold here. I either buy from overseas or not at all. The seller will make the tarp in the fabric I choose once I've ordered it. This is a person with no retail outlet, not a big store like Amazon. So, how would the government expect to charge GST on a purchase like this?