New Zealand Eyes GST Change
March 16, 2015 Taxation in New Zealand
WELLINGTON – New Zealanders may soon be paying more for online shopping, as the government looks into levying GST on small purchases which currently do not face the tax.
Late last week at the annual conference of the Institute of Financial Advisers the Revenue Minister of New Zealand Todd McClay indicated that the government may soon look into the feasibility of implementing new measures to potentially levy GST on small purchases made from overseas websites.
Currently physical and electronic goods purchased from overseas for a price of less than NZD 400 are not subject to GST, currently set at a rate of 15 percent, as the combined value of the GST and duties to be paid is less than NZD 60.
The information was met with immediate support from the spokesperson of Retail New Zealand Greg Harford, claiming that New Zealand could be losing as much as NZD 500 million per year in tax revenues due to GST lost through online purchases made from overseas companies.
Greg Harford also added that a change to the GST system may even the playing field between local retailers and overseas business, as local businesses are unable to compete in price due to their tax obligations, and these added commercial pressures were resulting in the losses of jobs, reduced profits, and, in some cases, the closure of businesses.
Photo By: Ciaran McGuiggan