Tourist GST Exemption Called For

June 6, 2010 International TaxationNew Zealand Taxation

Extremely Loud and Incredibly CloseIndependent business groups are calling for the New Zealand Government to institute a new Goods and Service Tax (GST) exemption system for visiting overseas-residents.

On June 5th Cameron Brewer, CEO of the Newmarket Business Association, issued a statement supporting Ann Lockhart, CEO of the Queenstown Chamber of Commerce, who on the same day called for a revised GST-exemption program to be instituted for foreign visitors. Under the proposal, overseas nationals could present their purchase invoices at a New Zealand international airport and be granted an exemption on any GST paid on purchases throughout their visit.

The comments were sparked by a speech given by Bill English, Finance Minister of New Zealand, in which he refuted the possibility of a GST-exemption system being created in the near future. Bill English stated that he is not in favor of contributing complications to the country’s current “clean” GST system. He added further opinion, saying he does not believe that tourists would not cease visiting New Zealand simply because of a lack of GST refunds.

According to Ann Lockhart, the refunds would not be aimed at attracting new tourist to the country, but increasing the amount of spending that visiting tourist do, during their visits. Cameron Brewer’s statement claimed that even if only 5 percent of tourist utilized the scheme, an additional NZD 30 million extra spending would occur as a direct result. Cameron Brewer added a note of consolation, saying that despite Bill English’s words, John Key, Prime Minister of New Zealand and national Tourism Minister, is interested in perusing the matter further.

Photo by matt.hintsa