Maurice Williamson has seen sense and declared that it would be almost impossible to accede to the whacky demands of retailers who are insisting that GST be levied against all online transactions.
Customs Minister Maurice Williamson says it would be virtually impossible to charge GST on items being bought online, an idea currently being explored by government officials.
The Inland Revenue Department and Customs have set up a working group to establish whether 15 per cent GST should be charged on items bought online which cost less than $400. Other countries, including Australian and the United Kingdom, are currently grappling with how to introduce such a system.
It has the support of New Zealand retailers, who say it would create a level playing field with the booming online market, but Williamson could not see how it would work.
“Because I’ve got a technology background I think … it’s just about going to be impossible to do,” he told Radio New Zealand.
“It would be great if we had some easy mechanism to charge it against credit card transactions but that would mean you’d have to identify whether the person was actually in New Zealand at the time.
“There will be all sorts of digital payment systems in the future like digital money and PayPal and digital coin payment systems – how would you track those?”
If retailers want to be competitive against online retailers overseas then it is simple…they have to offer the same goods and services at the same price points with the same choice, but the sad reality is they won’t and don’t.
Take the sporting goods area…there is this persistence of exclusive distributorships, where retailers have to deal with the middle man who owns the “country rights” to a particular product. This could be boots, rifles, packs…almost anything. The middle man gets paid and the retailer needs to get paid too but the consequence of this outmoded business model is that something like a good pair of boots can cost over $175 for the same item that can be bought via Cabelas or Bass Pro. Even when GST and shipping is paid it is still cheaper.
Almost everything that we have in New Zealand is dearer than elsewhere and more than the cost of freight too…people can literally let there fingers do the walking and they are y shopping offshore.
Stopping it and erecting walls to protect outmoded and old-fashioned business models would be electorally stupid, it would National’s light bulb moment.