Online shoppers to pay GST from next year

By Moana Makapelu Lee

Online consumers will no longer be free of GST when purchasing products online.

Today the government announced its new tax policy where offshore companies will soon be required to pay GST for goods under $400.

New Zealand retailers are welcoming the new GST bill which the government says will see fair retail across the board, both over-the-counter and online.

Wellington business owner Tilly Lloyd says, "This is a really important equity news for our customers who are part of millions of New Zealand customers who are shopping locally and paying GST, and until now been penalised for their localism".

The "Amazon Bill" will see offshore purchases as little as a dollar now taxed.  Large firms such as eBay and Amazon will soon be required to register, collect and return NZ GST goods.

Minister for Revenue and Small Business, Stuart Nash says, "We need to level the playing field.  It isn't fair that NZ retailers pay GST where online retailers don't".

The bill will exclude businesses acquiring less than $60,000 annually and is expected to generate $57mil in its first year.

Minister of Customs, Meka Whaitiri says the equal playing field for both New Zealand and offshore companies will ensure security for small businesses.

"That translates into obviously keeping our people in jobs, keeping those Māori retailers because we do have them in operation," says Whaitiri.

Whilst not all are welcoming the new GST levy with prices for online goods expected to hike, Nash disagrees saying consumers will pay less with decreased costs on tariff, biosecurity fees and cost recovery charges.

"Under this model you actually pay less.  But for the majority of goods, products may increase but I refute the allegation that New Zealand margins are higher.  For some products they might be, for some products they mightn’t be”.

The bill is expected to come into effect in October next year.