Revenue Minister Stuart Nash says GST will go on online goods, then backs down

by Checkpoint / 16 November, 2017

Revenue Minister Stuart Nash Photo: VNP / Phil Smith

The government has backed off suggestions that GST on online shopping was inevitable, saying it will be discussed as part of its tax working group.

Local retailers have been pushing for the GST charge for some time, saying it would level the playing field.

Earlier yesterday, Revenue Minister Stuart Nash said the government would "absolutely" introduce a GST charge on goods bought online from overseas companies.

Mr Nash later failed to appear at a planned media briefing and would not answer questions from RNZ about the proposed charge.

Finance Minister Grant Robertson did front up to media and said that when Mr Nash said it was happening, "he means that we're working on it and he did say that we don't have the full process or timeline for that".

In a statement released late yesterday afternoon, Mr Nash said the government's tax working group will be looking at GST on online goods and services.

"Work is already underway on this issue and it will be incorporated into the working group's considerations, who will be given the ability to make an early recommendation on this matter as appropriate."

New Zealand retailers have argued that their customers have been punished for buying locally.

Unity Books co-owner Tilly Lloyd said her customers in this country were essentially paying a surcharge of sorts and the sooner a GST was introduced, the better.

"It's really good news for our street and online onshore customers, they won't be subsidising Amazon customers anymore. All it required really was will and courage and now Nash has taken that, that's good, and the methodology for applying it, they'll work it out."

While consumers could expect prices to rise by 15 percent, PwC managing partner and tax expert Geof Nightingale says that could be offset because it could help avoid further rises in income tax.

Retail NZ has estimated that the government would be missing out on $5.8 billion in lost GST revenue over the next 10 years.

Mr Nightingale said it was likely New Zealand would follow what Australia was implementing in July next year.

"What they've done in Australia is go to the foreign supplier collection model, asking the supplier - think Amazon - to register for GST in Australia and they'd take responsibility for collecting the GST and not involve customs."

The previous National government already brought in the so-called Netflix tax, which means online services, like video and music streaming and downloads, are subject to GST.

Customs had also been tasked with looking at how to collect GST on low-value imported goods,

 

This article was originally published by RNZ.

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