I’m interested in hearing from anyone who is considering making a submission in response to the latest discussion document from Inland Revenue on GST.
They are looking for feedback on the suggestion of loosening the rules for overseas businesses wanting to recover GST on business related expenses they incur in New Zealand.
It can be difficult for a business to get GST back on NZ expenses if they don’t have a physical presence in New Zealand. Inland Revenue recognise this and have put forward a couple of options to solve the problem. One option is a relaxed GST registration process and the other a refund claim procedure. The registration option reflects how the Australians deal with the issue and the refund claim procedure is essentially how the EU countries approach it.
Personally I’m in favour of the registration option but am interested in hearing from others on their views.
If the proposal becomes law we’re told it means the Government will lose some revenue. Clearly that’s not a particularly appealing notion at the moment if you’re a politician so it will be important that those who support the proposal make their support known. Otherwise it will just be another good idea consigned to the bottom of the pile.
Of course this concession for business raises again the question of whether it’s time for NZ to match the rest of the VAT world and put in place a refund scheme for tourists. Small steps………….