Labour on GST on overseas purchases

Retailers are lobbying the Government to address competiton between local sales and buying from overseas by changing the GST rules on overseas purchases, as reported on Stuff in Retailers in GST counter-attack

Retailers are stepping up efforts to close a “loophole” that allows GST-free purchases of overseas goods costing less than $400.

The Booksellers Association yesterday released research commissioned from a Victoria University “think-tank” which suggested slashing or abolishing the threshold altogether, and that overseas retailers could be given the choice of collecting the tax on behalf of Customs.

Association chief executive Lincoln Gould said the failure to impose GST on personal imports represented “a serious and growing hurdle” for local booksellers and other retailers.

David Farrar at Kiwiblog argued against this in Retailers need to stop trying to tax us online. He also picked up on a comment about Labour:

Labour revenue spokesman David Cunliffe said a low threshold for charging GST on overseas purchases would stop the Government “subsidising foreign commerce” and was a “no-brainer”.

Farrar commented:

Oh wonderful. Make sure everyone knows this. Labour Party policy is to tax your online purchases more. Buy a book from Amazon, and Labour will hold it up at the border until you pay the Government an extra 15% of the price.

Will Labour also block itunes? We can’t have people downloading music and not paying GST on it. So to implement their policy they’ll have to block itunes in NZ, and only allow people to purchase from a NZ located online retailer.

Labour grandstanded on the carpark tax (yet never had a clear policy on it), but have now trumped that with their e-tax. I look forward to detailed Labour policy on what they would reduce the threshold to so we know how many of our online purchases they plan to stop at the border.

This appears to be based on an inaccurate report. Cunliffe on Twitter:


TP-S writes up a question as a statement and DPF goes ape… Calm down folks there is more work to be done on that question.

(TP-S is Tom Pullar-Strecker, the journalist who wrote the article.)

That was in response to a direct question “what sort of lower GST threshold do you suggest for overseas purchases?”

It certainly doesn’t sound like a Labour party position any more than “presented the research to ministers, including Finance Minister Bill English and Revenue Minister Peter Dunne, and had been promised they would seek advice from officials” is a Government position on changing the threshold.

Cunliffe only took on the Revenue spokesperson role for Labour since the recent reshuffle.

He is well aware of how compliance costs can kill tax tweaks, he was vocal in the recent carpark Fringe Benefit Tax debate. New spokespeople seem to have a free rein to oppose Government consultations but could be forgiven for taking a bit longer to propose alternatives.

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