1 May 2018

GST change: Retailers rejoice, consumers divided

3:40 pm on 1 May 2018

New Zealand retailers are hailing the government's move to impose GST on goods bought from overseas websites, but not everyone is happy about the change.

Unity Books in Wellington.

Unity Books in Wellington Photo: RNZ / Richard Tindiller

Announcing the move at Unity Books in Wellington, Small Business and Revenue Minister Stuart Nash said the government needed to level the playing field for New Zealand retailers.

Unity Books Wellington's co-owner and manager Tilly Lloyd welcomed the move.

"The thing about Unity Books is that we're all about the customer so this is really important equity news for our customers who are part of millions of local New Zealand customers who are shopping locally and are paying GST and until now were being penalised for their localism," she said.

"They have added life to our streets, local money for wages and rents, and they have also supported our local online businesses which are competitive.

"Today's announcement's absolutely outstanding news for the whole of the retail sector in New Zealand."

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Manager and co-owner Unity Books Tilly Lloyd Photo: RNZ / Richard Tindiller

Wellington shoppers were not impressed with the change, however.

"I'm not very happy about it at all," Ash Meredith said.

"I get a lot of collectables from overseas which are usually under the $400 threshold and a lot of things you can't buy here in New Zealand, so penalising you because you can't buy something here and you have to get it overseas by putting a tax on it is extremely unfair."

Natalie Dickson also did not think imposing GST was a good idea.

"I think if we had the ability to buy more of those bits and pieces physically in New Zealand, there wouldn't be any need to go overseas and order them - so I don't think it's fair that you're spending extra on purchases that you're buying online," she said.

But Geoff Mason believed it was justified.

"I think it's a fair reflection on what people should be paying," he said.

"If you're paying them on domestic goods, you should be paying them on imported goods as well."

National revenue spokesperson Paul Goldsmith said the party would not oppose the move.

The previous government had also considered lowering the GST threshold but the advice it received suggested it was not worth the effort, he said.

"The principle everybody agrees with - you should have a level playing field.

"The trick is collecting it in a way that doesn't cost more to collect than the tax you're actually getting and sometimes it can be substantially more."

Retail New Zealand public affairs manager Greg Harford told Morning Report the announcement would be "very good news indeed for the sector".

New Zealand retailers facedan automatic price disadvantage of at least 15 percent and in some cases substantially more, he said.

"Typically, if a product is worth less than $400 and you're buying it on the likes of Amazon, that product can come into the country and not have GST or duty collected on it.

"Some products still have sort of a five or 10 percent tariff on it as well and that's a real issue for the competitiveness of the retail sector," Mr Harford said.

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