New Zealand is currently seriously disadvantaged by a loophole that means that people do not pay GST or duty on low-value purchases (generally goods less than $400 in value) when they buy from foreign websites. This creates a reverse tariff which unfairly discriminates against Kiwi retailers. Booksellers NZ have worked hard alongside Retail NZ for many years to level the playing field for local retailers including our membership bookstores.
Booksellers NZ firmly believes it is the responsibility of parliament to ensure GST is a universal tax by requiring all retailers – whether they operate online, in bricks-and-mortar stores, or a combination of both – to fulfil their obligation to collect sales tax. See CEO Lincoln Gould speaking on this to Fairfax.
What we are proposing is neither a new tax nor special treatment for independent bookstores – it is an equitable and consistent enforcement of existing GST laws.
On 1 May 2018, it was announced by Revenue Minister Stuart Nash that the government had approved a change to tax law to ensure New Zealanders will be paying GST on offshore purchase from 1 October 2019. Here is the discussion document. The new rules for the collection for this tax were announced on 18 October 2018, and the details on how this to be implemented are available here. On 18 June 2019, there was a two-month extension notified for this tax to begin being gathered, to 1 December 2019.
Locally owned businesses have far greater positive economic impact on their communities and are largely responsible for our communities retaining their unique characteristics. The current de minimis threshold enabled offshore online retailers to hold a 15 percent competitive edge over local businesses and contributesdnothing to the sustainability of the New Zealand economy.
The Government will now be able to collect at least $200 million a year in revenue from low value goods, not counting GST that would otherwise be paid on cross-border services and digital downloads delivered into New Zealand.