The thin end of the Internet GST wedge has arrived

I’m not sure how Todd McClay thinks that breaking John Key’s ‘no new taxes’ pledge is going to help National but he has decided to bring in a tax on internet purchases anyway.

The Government is moving to slap the goods and service tax on online service purchases, which will mean a price rise for the likes of subscriptions to Netflix and Apple services.

It is proposing a law change which will require the overseas retailers to be GST-registered and for them to return the tax to the Government – which says it is now missing out on around $40 million a year and growing.

Currently if you buy anything worth less than $400 from overseas you don’t have to pay the 15 percent GST.

“It is about creating a level playing field for collecting GST and putting New Zealand businesses and jobs ahead of the interests of overseas suppliers,” Revenue Minister Todd McClay said.

The Bill was introduced to Parliament today and the Government hopes the law will be in place in October next year. ??

The GST will also apply “cross-border remote services and intangibles” – things such as e-books, music, videos and software.

Offshore suppliers will be required to register and return GST when their supplies to New Zealand residents exceed $60,000 in a 12-month period.

The Government says companies are likely to comply with the requirement to protect their reputations.

US-based Netflix, the world’s largest streaming television and film service, launched in New Zealand earlier this year, prompting Spark to complain its Lightbox service was at a disadvantage because it was subject to GST.

Spark is likely to be happy with the Government’s move but lobby group Retail NZ says it delays a similar move for low-value goods.

If retailers think this will rebalance things then they are sadly mistaken.

I no longer buy most of my big ticket items from New Zealand. The prices are ridiculous.

I ditched Sky, use Netflix, Amazon Fire TV plus the native apps on my Samsung TV. I buy books from Amazon. All my hunting gear comes from either Bass Pro, Cabelas or 5.11 and all online. Even scopes are cheaper online from reputable sellers. The last memory upgrade on my computer was sourced from New York and arrived inside 5 days.

It is easier, more convenient and cheaper to buy online.

Adding GST won’t change my buying habits in?the?slightest. And here is the real kicker…I could use a government agency (NZ Post) to circumvent the GST anyway because I can send to their centre in the US, and therefore qualify for US shipping rates etc and not pay NZ GST, then have NZ Post deliver it to my door.


– 3News