Customs agency dragging the chain on offshore GST: retailers

See also: GST extension to offshore services includes gambling, insurance and Netflix

The New Zealand Customs Service is dragging the chain on moves to collect goods and services tax on imports of physical goods in the same way as the sales tax will be levied on e-commerce transactions from October next year, says Booksellers NZ, the national lobby group for book stores.

Revenue Minister Todd McClay announced yesterday the tax department will be collecting revenue from October next year on low value e-commerce transactions for items such as e-books, streaming music and TV-on-demand but Customs has today delayed the release of a discussion document on taxing low-value physical goods such as books, CDs, DVDs, clothes and shoes by five months.

"A discussion paper on applying GST to online purchases of small value goods was expected this month," Booksellers NZ chief executive Lincoln Gould said in a statement. "Now today, the minister has said this discussion paper will not come out until April next year from the Customs Department.

"It is unclear why Customs takes any longer to rectify this issue than Inland Revenue, given the years that it has been on the table," Mr Gould. said. "Recently released guidelines on the issue from the OECD pointed a way forward, and "other countries have followed already."

There was "nothing for small businesses and their communities" in today's announcements, said Gould, a sentiment echoed by Retail NZ's public affairs general manager, Greg Harford.

"This bill further delays addressing the issue of low-value goods which is a long-standing and significant problem that disadvantages domestic retailers and has negative repercussions for the whole economy," Mr Harford said. "The bill appears to require global e-tailers like Amazon to charge GST on online services, such as e-books, while physical goods will continue to cross the border without tax."

The current loophole for physical goods attracting less than $60 of GST – known as the 'de minimis' amount of tax – "acts as a reverse tariff on local suppliers," Mr Harford said. "If we are going to have GST, it needs to apply across the board."

(BusinessDesk)