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GST and online shopping – is there a cure?

The NZ Government has delayed the Customs / IRD report on GST and online trading to allow the issue to be considered as part of the wider review of how global corporates are taxed. I think the merger of the issues was unavoidable. They are closely linked and the ultimate solution will be multilateral.

Nevertheless we’ve just come through another peak retail season with shoppers confirming their increasing appetite for internet purchases. Senior politicians have taken notice of the amount of GST being lost to the government and local retailers wonder why their overseas competitors continue to have this advantage over them.

As I see it, there are two interim solutions:
1. Remove the low value import threshold.
2. Introduce a domestic low value threshold for GST purposes.

Each has its own challenges and each means more compliance costs for someone. The first option appeals more however because it is consistent with perserving the integrity of our existing GST system.

cheers

Iain

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Good news

Might as well start the year with a bit of good news, even if it’s a little old by now.

On 11 December the Government gave us a xmas present with the announcement by the Minister of Customs the Temporary Import period for yachts, launches and small craft will be extended from 12 months to 24 months.

This means visitors coming to NZ on their yachts or launches can stay here longer without having to pay duty or GST on the value of their vessel. They’ll be able to have more work done by our brilliant marine businesses, will be able to spend more time visiting NZ’s amazing tourist attractions and will be able to spend more money here.

Around 700 private craft visit NZ every year of all shapes and sizes. Marine industry representatives reckon this measure will increase that number by 25%.

This is surely good news. An incentive for visiting yachties to stay longer.

Cheers and Happy New Year

iain