Value added tax

Key keen for us to pay GST on overseas online purchases, that will go down well

John Key seems intent on trying to stiff us all for more GST all to save a dying, outdated retail model.

Prime Minister John Key has indicated the threshold for paying GST could be cut to $20, or even zero, for internet services such as Netflix.

At present, most goods bought online from overseas costing less than $400 are GST-free.

Revenue Minister Todd McClay has confirmed he will take a paper to Cabinet this month on reducing that threshold.

Eugen Trombitas, a PriceWaterhouse Coopers partner and GST specialist, said one solution was to have the foreign seller registered so they comply with domestic tax laws.

“You could look at Customs collecting a little bit more, and there’s some efficiency gains through technology. ?? Read more »

Swiss voters reject carbon tax by overwhelming 92%

It seems the Swiss are perhaps the most sensible people in Europe.

They certainly don’t appear to be infected with the cult of gaia, after overwhelmingly rejecting a carbon tax with 92% of the vote.

Swiss voters Sunday overwhelmingly rejected an initiative that would have scrapped the Alpine country?s value-added-tax system and replaced it with a carbon tax, a move that would have made gasoline, heating oil and other forms of power more expensive for consumers.

Roughly 92% of voters opposed the initiative, known as ?Energy Rather than VAT,? while 8% supported the measure, according to preliminary results from 13 of the country?s 26 cantons. ? Read more »

Using tax cuts to revive the economy – How the poms see NZ

The opposition likes to talk down the economy and the government, yet New Zealand has recovered faster than the rest of the world from the global financial crisis, without the need to slash and burn.

Our economy is the envy of the world.

Even the Poms see that:

In New Zealand, John Key?s National Party romped home to victory on a platform of cutting taxes and balancing the budget, trouncing a Labour opposition that promised to put up taxes. Slashing the top rate of tax has revived the economy, and been rewarded with electoral success as well. True, there are lots of differences between New Zealand and this country. And yet the truth is, there are a fair few similarities as well ? and if tax cuts can work there, they can work here.

For a small place a long way from anywhere, New Zealand has a fine history of leading the way with radical experiments in economics. While we were battling over Thatcherism, and the Americans were debating Reagan-omics, the Kiwis had ?Rogernomics?, created by the Labour finance minister Roger Douglas. What had been a very 1970s, state-dominated mixed economy was swiftly transformed under Douglas into a laboratory for free market ideas. Financial markets were deregulated, the money supply was brought under tight control, the currency was floated, and industries were privatised. It was a mix that was to become orthodoxy by the 1990s, but Douglas was implementing it while our Labour Party was still planning to nationalise the top 100 companies.

Now it is doing it again ? except this time without any encouragement from the US or the UK. Ever since the financial crash of 2008, even centre-Right governments have followed a very narrow path, buying into high taxes, and near-zero interest rates, and allowing budget deficits to balloon, even when financed by printed money, to keep the economy afloat. No one has strayed far from the orthodoxy. Except, that is, New Zealand.

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Labour already tried that Winston, wasn’t a winner

Winston Peters is channelling Labour with his silly GST suggestions.

Removing GST from food never worked for Labour, despite them claiming that was a game changer policy.

NZ First has announced a plan to remove GST from food, as part of several policies announced at its party conference.

Leader Winston Peters also said the party wanted GST removed from rates on residential property calling it a “tax on tax deceit”.

“This bold policy aims at the heart of the inequality undermining our society,” Peters said.

Labour had a policy of removing GST from fresh fruit and vegetables going into the 2011 election but it has since been dropped by the party. Last week Peters accused the Conservative Party of plagiarism because it believed the party was lifting its policies.

Peters said the policy was estimated to cost $3 billion a year, and would be funded by a clamp down on “tax evasion and the black economy”, which it estimated to cost $7 billion a year, and what Peters said was “drawing on the projected surplus of billions in the years ahead that result from running a sound economy”.

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An idea for Finland Fanboi Shearer to Ponder

David Shearer is a big fan of Finland…perhaps he will soon start suggesting this solution, taxing unpaid work:

FINLAND’S tax authority is trying to find new ways to increase revenue and is considering going so far as to tax unpaid labour, an official has told public broadcaster YLE.

The tax office was looking at service exchanges in particular, such as time banking, where reciprocal services are exchanged using units of time as currency, or more informal arrangements such as that between two neighbours.? Read more »