The New Zealand government is still keen to curb the growth of online shopping, which is putting the hefty profit margins of many NZ businesses at stake.
Anxiety in New Zealand is mounting after shopping giant Amazon set up shop in neighboring Australia, which has a goods and sales tax of 10%. New Zealand’s tax is currently 15%. Netflix has also announced their Australasian service will fire-up sometime this month.
From today’s NZ Herald we learn the government is using a declining tax-take as an excuse to impose heavier tax liabilities.
We think this is cover story designed to deflect attention at a time when the TPPA is supposed to make goods cheaper for New Zealanders, while threatening the profit margins of many Kiwi businesses.
Extra charge on downloads: Online shoppers could soon be hit with GST
“New Zealanders could soon pay GST on online purchases as small as a song download from iTunes.
It is inevitable that the cost of online shopping will go up as GST is charged to more goods and services, Prime Minister John Key says.
GST is not currently charged on imported digital products such as music and film downloaded from services including iTunes.
Physical goods bought online and worth less than $400 also usually escape GST.
Mr Key today said the continuing growth of online shopping was considerably affecting the Government’s tax-take…
…New Zealand is also involved in efforts by the Organisation for Economic Co-operation and Development (OECD) to develop international rules.
Mr Key said that if the OECD was moving too slowly on the issue New Zealand could go it alone with measures.
However, working with other countries made sense.
One benefit would be to ensure online retailers were compelled to sign-up to a scheme that would require them to collect and pass on GST.
If they did not, they would not have access to shoppers in all OECD countries.
Such a move has long been lobbied for by retailers. They see the current situation as unfair competition – a view Mr Key agreed with…” more here
If New Zealand wants a level playing field perhaps it must reduce its rate of GST first?
NZ Netflix Won’t Charge GST
Also in today’s NZ rip-off news…
Netflix won’t charge Kiwis GST
Sparks are flying after Netflix said it would not charge GST on the New Zealand version of its online television service which launches next Thursday.
Andrew Pirie, spokesman for Spark, which owns rival internet television service Lightbox, said it was “yet another example of the lack of a level-playing field in this rapidly changing digital world”…
…United States-based Netflix, Sky Television and Spark are locked in a bidding battle to secure the best programmes for their streaming televisions services and to win over consumers in what is expected to become a fiercely competitive market.
But Netflix will have a 15 per cent cost-advantage over Lightbox and Neon because it will not have to charge viewers GST… more here
Putting the GST element aside for one moment, Netflix’s NZ service is likely to be substantially cheaper than Lightbox ($15 for 30 days) and Neon ($20 for 30 days). The real issue here is this – by breaking the monopoly, NZ Netflix subscribers are getting value for money. The Kiwi big boys are worried, and about time too.
More rip-off NZ stories may be found here
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