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Debate on GST and private imports

Today’s NZ Herald editorial argues collecting GST on low value imports is more trouble than it’s worth and advocates retaining an exempt threshold.


The debate seems to be gaining momentum and the Customs Department are in the middle of a public consultation process on this issue.

Some feedback providers to the Herald reckon collecting GST on small imports wouldn’t be as costly as the Herald suggests. The solution apparently is to get credit card companies to collect the GST. Interesting solution. Rather than government paying the costs of collecting these trivial amounts of tax we’ll just get someone else to. That way it’ll be free to collect and the government will have the extra money! Goodness me, are there really people out there who still believe in free lunches?

If we’re going to crack down on these low value imported goods surely we have to get stuck into imported services? At the moment you can import up to $60,000 of services for private purposes without paying GST. That applies to music, software, e-books and anything else delivered digitally yet the threshold for imported goods is $400.

And, what about those people who buy stuff overseas when they’re travelling and bring it into NZ duty/GST free using the $700 threshold?

To me the issue here is not whether we have an exempt threshold but whether we’re being consistent in how we tax goods and services imported into NZ.


2 replies
  1. Tavish
    Tavish says:

    Hello Iain. Firstly, thanks for providing such an insightful website on many of the hidden aspects undertaken throughout the trading process.

    I have a question in relation to your opinion that services are the major area that needs to be reviewed in the Customs importing procedure. Residing in Australia do you know how much the amount available to import for services is? Additionally, is it as high a figure as New Zealand’s $60,000? Do you think that the current threshold of $1,000 on low value imports is doing an appropriate job in measuring this low value trade?

    Look forward to your responses. Thanks.

    • iainblakeley
      iainblakeley says:

      Hi Tavish

      Thanks for your feedback. I can’t really give you a complete answer on the Australian position. The $60,000 I’m talking about for New Zealand is what we call the “reverse charge”. It applies when someone imports services other than for making supplies of goods and services which are subject to GST. Most private individuals probably would never come close to importing that much digital product or other services in one year so it’s not really an onerous threshold.

      There is a reverse charge mechanism in Australia and it could well work a similar way.

      My point was, there seems to be inconsistent treatment for services and goods.


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