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.