Some economists are concerned a law change would be difficult to enforce, as does Consumer NZ. Chief executive Sue Chetwin says Customs commissions New Zealand Post to check the value of items coming into the country, but with more and more Kiwis going online to do their shopping, the sheer volume makes it impractical.
“The chances of you getting caught are going to be quite low… I know ignorance is no excuse, but you know, when you buy something online you won’t be scratching your head saying, ‘Am I being charged GST for this or not?’ You’ll just be paying the price… you will be breaking the law, but who’s going to know?”
While it would be easy to get large companies like Amazon and iTunes on board with collecting GST, they’re only two of thousands of online stores, and not all will have the technology – or will – to do it.
“They will have to know that GST is collectable in New Zealand, so presumably they’ll have to register somewhere to sell products in New Zealand… apart from that, it may well be they say, ‘Look, I’m sorry… this is just too hard. You’ll have to come to Santa Monica to buy the shoes,’ and they won’t bother to sell in New Zealand.”
New Zealand’s isolation makes it a unique case.
” New Zealand, I suppose, is like other countries but is also slightly unusual in that so much of our shopping is done overseas because there is a lack of choice here,” says Ms Chetwin.
“So when you look at the US, UK and Europe, they probably aren’t as big at shopping online overseas because domestically they can buy quite a lot with a lot of variety – much more than we can here.”
She agrees with Retail NZ that the Government’s initial strategy of focusing on digital services won’t do much to help local retailers, suggesting it might instead be aimed at boosting a flagging tax take.
“[The Government’s worried about its lack of tax take, so it’s deciding to roll it out. It looks at the moment it’s only a discussion document that we haven’t already seen yet, but it looks like it will be on overseas services to start off with, so not much help for New Zealand retailers.”
It’s nice to see someone else calling a spade a spade – this isn’t about protecting our retailers from the commercial realities. This is about a government staring down an economy that’s slowing down. And that means a lower tax take. From that follows a persistent deficit. And then you get the 2017 election that has a large tax cut bribery component as part of its “strategy”.
But somewhat more important to you and me, by the NZ government insisting on getting its value added tax on goods purchased via the Internet, overseas retailers and traders may put our country in the “too hard” basket and stop selling and shipping to our fair isles.
– 3 News