Rip Off New Zealand – GST on online purchases as small as a single song from iTunes. Netflix minus GST.

rip off

Shopping in New Zealand is set to become a whole lot more expensive

 

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

Netflox

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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Rip Off NZ – Plans to add 15% sales tax to overseas internet purchases – You’ve gotta hand it to the NZ government, with such a small population it definitely has to come up with innovative ways to raise revenue.

New Zealanders already have the inconvenience of limited choice combined with the harsh sting of high prices. They enjoy being able to buy goods over the net that they can’t obtain in this remote country. Additionally, local retailers take advantage of the local market by overcharging wherever they can get away with it.

Items New Zealanders like to buy from overseas include pharmacy products (local prices are exorbitantly high) clothing, music, children’s toys, software, make up, car parts and many other items that most of the developed world takes for granted. These aren’t luxury goods by any means… read on

Rip Off New Zealand – Pharmacy Prices a Bitter Pill – .”Shame on the pharmacists of New Zealand who over charge sick tourists during holiday periods.New Zealand’s pharmacy prices are already among the highest in the OECD with a wholesale mark up of 10% over the manufacturer’s price plus the pharmacy’s mark up (in the USA the wholesale mark up is around 2-4 %). But that doesn’t stop unscrupulous owners from over charging visitors who need essential medications… read on

“NZ…Land of the Big Ripoff” :”Why is everything so expensive here? Are retailers just greedy or is it the government making it that hard for the retailers to make a living that drives the extorsion they call retail pricing. I have been looking for a new pair of running shoes; i’ve shopped around & the ones I want are $279 here in NZ… yet I can buy them (& just have) from USA for $39.99 plus $22 freight. I also bought a new telescopic sight for my fathers rifle from the same store for $69.99 which has been put in the same box so no extra freight charge on that item. The exact same sight here is $498. C’mon NZ, stop ripping us all off!” … read on

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