Retailers Want to End GST-Free Online Sales

November 22, 2010 New Zealand Taxation

KeyboardThe New Zealand Revenue Minister Peter Dunne is being lobbied by the Retailers Association, in an effort to extend current Goods and Service Tax laws to international online purchases.

As the Government carries out a review on its laws regarding levying Goods and Service Tax (GST) on overseas retailers, the Retailers Association has weighed in on the matter, calling for the tax to be charged on all overseas purchases. Retailers Association chief executive John Albertson claims that the laws need to be expanded to protect New Zealand retailers from “unfair competition” from large international websites. He went on to say that while he does not know how much money is spent with overseas retailers, he believes the amount would be “significant”.

Under current regulations, GST is not levied on any products brought directly from overseas, as long as they are valued at less than NZD 400.
John Albertson did not propose any set means of collecting the GST or ensuring that it is paid in full. Although he did comment, saying “…what we need to find is a clever way of electronically collecting GST. If we could find a way of collecting the money I think [Mr Dunne] would be happy to have it.” Ben Gracewood, New Zealand technology commentator, has already pointed out the potential flaws in the system, saying that this would require too much collaboration from foreign companies, requiring them to provide the Inland Revenue Department with their regional sales information.

Photo by yum9me