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GST move levels playing field for NZ business

Plans for applying GST to imported low-value goods would level the playing field between overseas and domestic retailers and help make New Zealand’s tax system consistent with other countries, says BusinessNZ.

Under the proposed plan, from October 2019 offshore providers of all goods into New Zealand would be required to register and pay GST to Inland Revenue.

BusinessNZ Chief Executive Kirk Hope says New Zealand retailers would welcome the move, and said there would be benefits for customers as well.

“It would not mean extra compliance for New Zealand customers, and it would provide some certainty around pricing of imported goods.”

He said by treating lower- and higher-value goods the same for GST purposes, the scheme would be consistent with the rest of New Zealand’s broad-based, low-rate GST system.

Mr Hope said IRD’s consultation on the proposal would help work through any workability issues with the proposed scheme.

He said the system would take time to develop, with more work needed on policing of overseas providers and their reporting systems for tax collection.

“We have treaty arrangements with other countries that would allow us to request them to collect unpaid GST on New Zealand’s behalf, and we need to develop joint registration and collection systems with those countries.

“Once the system was fully developed, we would achieve a GST system that was comprehensive in New Zealand and aligned with other sales tax systems internationally.”

Source: BusinessNZ

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