2 Jun 2018

Concerns over Amazon's NZ future after GST changes

9:20 pm on 2 June 2018

Amazon's decision to block Australian consumers from its main website has raised concerns over whether it will pull out of New Zealand when GST changes here come into force.

A man shops online.

Photo: RNZ / Rebekah Parsons-King

The New Zealand government is expected to charge GST on goods purchased online from October 2019, following an announcement last month.

It is proposing to collect GST on goods at the point of sale and has already applied GST to digital services from offshore.

Changes to GST regulations in Australia, set to kick in from 1 July, have resulted in Amazon blocking access to its global website, redirecting consumers to its local Australian site instead.

New Zealand does not have a local Amazon website and Consumer New Zealand said online retailers like Amazon could pull out of the market completely.

"Some overseas companies could realistically see selling into a relatively small market like New Zealand as too much trouble," head of testing Paul Smith said.

"That potentially would leave New Zealand consumers with less choice of product and, most likely due to less competition, higher local prices."

Retail New Zealand said Amazon's decision to block Australian consumers should not affect the New Zealand government's proposed GST changes.

"New Zealand tax policy should be dictated by New Zealand, not by a big global corporate," general manager of public affairs Greg Harford said.

Amazon is already GST-registered in New Zealand and pays GST on all digital products purchased through it.

If Amazon did decide to stop shipping to New Zealand, consumers could still access products through services like New Zealand Post's YouShop, which provided forwarding addresses in the US, Mr Harford said.

It was too early to say whether Amazon would take the same approach in New Zealand as in Australia but Mr Harford said other retailers would fill the gap in the market if the online retailer decided not to ship to New Zealand.

"Amazon is not the only major multi-national e-tailer that's out there... eBay is the obvious competitior to Amazon and it has announced that it is going ahead to comply with the Australian laws unlike Amazon which is preferring to push people to its new Australian website."

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