GST on online shopping

[Breaker 980]

This likely won't happen till there is international agreement on how to do this, it'll happen but not any time soon.

It'll be When the big guys want it to happen and that's not likely cause it'll reduce their exports so wouldn't even expect anything soon, every country is having the same issues

[_ethrty-Andy_ 2122]

This likely won't happen till there is international agreement on how to do this, it'll happen but not any time soon.

Lol

[HSB 282]

I agree with both the above comments, The government charges all these taxes etc but we never know where the money goes to. I think it sucks personally but their fat pockets have to be funded somehow. Instead of trying to tackle the problems at hand (i.e ridiculous house prices) they go and create new problems for us online shoppers. I buy mostly everything online,supplements, parts etc everything. this PMO!

So. Lets take the past few days shall we?

You helped fund other Kiwis to go to Gallipoli to celebrate our historic 100 year anniversary of the ANZAC landings. [see: http://beehive.govt.nz/release/pm-attend-gallipoli-anzac-day-commemorations]

You helped fund civil defence specialists to go and ensure the safety of your fellow Kiwis who are living on the isolated Chatham Islands who have taken a bit of beating from Cyclone Pam. [see: http://beehive.govt.nz/release/minister-thanks-all-involved-cyclone-response]

You helped contribute 2.5 million dollars to our Pacific neighbours of Vanuatu who are facing terrible destruction and the aftermath of Pam which includes hygiene and sanitary issues, food shortages, health problems, not to mention deaths. Oh, yeah, you have also helped get many Kiwis home who were stuck there. [see: http://beehive.govt.nz/release/nz-aid-flight-tanna]

You have helped fund the development of arguably one of the most neglected but extremely necessary parts of NZ Health system which is Mental Health services for young people (read: depression). [see: http://beehive.govt.nz/release/youth-accessing-primary-mental-health-services]

their fat pockets

$150,000 (baseline MP yearly salary) x 120 MPs = $18 million. A drop in the bucket in the tax collection world.

Instead of trying to tackle the problems at hand (i.e ridiculous house prices)

We don't live in a communist society - so look to live elsewhere if you would like to live in a place where the Govt can dictate market house prices (freedom of market, supply and demand anyone?).

Although i am all for supporting NZ business, they do need to wake up and be competitive, and competitiveness does not just mean on price.

This.

This is where their plan is flawed and why such GST is not collected.

A huge logistical nightmare.

There looks to me no plan just suggestion. But like most suggestions it needs credible policy framework. This will be years off if it even gets that far. And you are right it will be a logistical nightmare.

Agree. They will quickly find it costs way too much to chase the money.

Exactly the actual ability to implement such a policy is minute.

You ask an overseas retailer to add 15% on each transaction that 'appears' to be from NZ I.P? Then buyers use a proxy and make it look like they are elsewhere.

You say POS charges will just be made when your debit/credit card is charged by an overseas vendors? How do you monitor that - especially when charges offshore could be made when travelling.

You say the responsibility is on the buyer to register all offshore purchases with the Taxman at the end of each financial year? So how do to catch people out? Monitor all NZs incoming mail? And then try to differentiate between what is a gift and what is a purchase? No, no, no. Will not ever be feasible (financially or logistically) ever.

My view? Its nice rhetoric to small to medium business owners but it ain't gonna happen. If it could have happened, 7th year into a fiscally prudent National Government, it would have already.

[BMTHUG 943]

So. Lets take the past few days shall we?

 

You helped fund other Kiwis to go to Gallipoli to celebrate our historic 100 year anniversary of the ANZAC landings. [see: http://beehive.govt.nz/release/pm-attend-gallipoli-anzac-day-commemorations]

 

You helped fund civil defence specialists to go and ensure the safety of your fellow Kiwis who are living on the isolated Chatham Islands who have taken a bit of beating from Cyclone Pam. [see: http://beehive.govt.nz/release/minister-thanks-all-involved-cyclone-response]

 

You helped contribute 2.5 million dollars to our Pacific neighbours of Vanuatu who are facing terrible destruction and the aftermath of Pam which includes hygiene and sanitary issues, food shortages, health problems, not to mention deaths. Oh, yeah, you have also helped get many Kiwis home who were stuck there. [see: http://beehive.govt.nz/release/nz-aid-flight-tanna]

 

You have helped fund the development of arguably one of the most neglected but extremely necessary parts of NZ Health system which is Mental Health services for young people (read: depression). [see: http://beehive.govt.nz/release/youth-accessing-primary-mental-health-services]

 

 

$150,000 (baseline MP yearly salary) x 120 MPs = $18 million. A drop in the bucket in the tax collection world.

 

 

We don't live in a communist society - so look to live elsewhere if you would like to live in a place where the Govt can dictate market house prices (freedom of market, supply and demand anyone?).

 

This. 

 

There looks to me no plan just suggestion. But like most suggestions it needs credible policy framework. This will be years off if it even gets that far. And you are right it will be a logistical nightmare. 

 

Exactly the actual ability to implement such a policy is minute.

 

You ask an overseas retailer to add 15% on each transaction that 'appears' to be from NZ I.P? Then buyers use a proxy and make it look like they are elsewhere.

You say POS charges will just be made when your debit/credit card is charged by an overseas vendors? How do you monitor that - especially when charges offshore could be made when travelling.

You say the responsibility is on the buyer to register all offshore purchases with the Taxman at the end of each financial year? So how do to catch people out? Monitor all NZs incoming mail? And then try to differentiate between what is a gift and what is a purchase? No, no, no. Will not ever be feasible (financially or logistically) ever.

 

 

My view? Its nice rhetoric to small to medium business owners but it ain't gonna happen. If it could have happened, 7th year into a fiscally prudent National Government, it would have already.

Wow wow wow Helena. Some valid points there. Sassed brau

[gjm 3194]

If you buy overseas and the seller charges tax locally on your purchase (VAT, sales tax, etc), will we be expected to pay GST on that tax? Any attempt at recovering tax from source is doomed to failure. It'll never work.

Charging GST on all overseas purchases would bring NZ in line with many other countries. When we moved here and I heard I could bring in goods (with combined purchase + insurance + shipping) value of up to $400 without paying any duties or taxes, I was amazed. I think the UK threshold is something like a combined purchase+shipping value of 15 quid. $30.

Buying from overseas will continue. I'm looking into a H&R Cup Touring suspension kit for the Merc. 4 shocks, 4 springs. Even taking into account currency conversion at fleece-me rates, PayPal fees, insurance, shipping, GST, handling and processing fees... It still comes out $00s cheaper than buying here. I'll be buying retail too, and not trade. This won't be affected by any changes.

Brake parts for the 320d came from the UK. I couldn't find, in NZ, a caliper rebuild kit that included a piston. The full set, all four corners (including pistons, bleed nipples, seals) and shipping (etc) cost the same as 1.5 seal-only kits from BMW NZ. And that was after discount from the very friendly and helpful parts guy at CJ in Hamilton. Didn't come close to $400.

It's a balance, and it's up to the buyer to decide what they want to do. There are some quite astonishing mark-ups in NZ, and some amazing apathy from some retailers. However, there is also some truly excellent service and (let's face it - NZ Post are 9 parts useless with tracking and international shipments) considerably faster delivery.

I also have an idea of the grief any retailer selling anything goes through - holding stock, maintaining inventory, tracking shipments, dealing with customers (!), refunds, restocking, credit card fees, rent, business taxes... A seller is entitled to some compensation for that.

Of course, the current system of charging $30-50 for handling and the like as a package comes through customs will destroy any cheap shipping. I have a couple of bits of electronics coming in from China, total value perhaps $20. I don't much fancy seeing that price potentially triple.

[CamB 48]

To bump this up, I see the following article. Not ideal - I want to buy some parts:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11498552

It piqued my interest though. As I think I said earlier in the thread, I don't actually mind paying GST, I want to avoid the fee:

Once the threshold of $60 of duty and/or GST payable is reached, then an import entry transaction fee (IETF) of NZ$49.24 (GST inclusive) is also payable. This includes the Ministry for Primary Industries biosecurity system entry levy of $17.63 (GST inclusive).

So how does the fee work elsewhere?

Canada: - $9.95

UK: - looks to be ... nothing

USA: - looks to be $2, $6 or $9

Now that's 5 mins internet research so I could be completely wrong, but it makes our system look ridiculous.

[_ethrty-Andy_ 2122]

the point about collection costs outweighing the revenue gained is an interesting one worth talking about..

in the short term, i totally agree,

but over the long term, would it be foolish to say it will work it self out by:

1/ Customs/IRD putting in more comprehensive systems to deal with the XXX% more paperwork, cost "per unit" decreasing

and/or

2/ a decrease small items purchases any rate, due to people buying thier new $8 iPhone case or $63 Vanos sensor locally

Thoughts?

[M3AN 4016]

GST != import duty - it's important to distinguish between the two.

And "online GST" is referring to digital, not physical goods.

[CamB 48]

True, not much has duty on it (randomly shoes do - important to protect that local industry...).

Anyway since then this - as you say, an initial focus on digital content.

http://www.stuff.co.nz/national/politics/71203435/buyers-set-to-pay-gst-on-overseas-online-services-by-christmas

[Driftit 1964]

GST != import duty

Too much coding for you.

[M3AN 4016]

Don't know how to do it with a single character (= + /)!

[gjm 3194]

GST ≠ import duty - it's important to distinguish between the two.

And "online GST" is referring to digital, not physical goods.

Fixed.

[M3AN 4016]

Smarty pants.

[zero 1160]

I agree with both the above comments, The government charges all these taxes etc but we never know where the money goes to. I think it sucks personally but their fat pockets have to be funded somehow. Instead of trying to tackle the problems at hand (i.e ridiculous house prices) they go and create new problems for us online shoppers. I buy mostly everything online,supplements, parts etc everything. this PMO!

This is where your taxes go;

http://www.wheresmytaxes.co.nz/

More detailed info of where every cent of our taxes go is available on the treasury website - so there is no conspiracy, you just need to look.

[_ethrty-Andy_ 2122]

This is where your taxes go;

http://www.wheresmytaxes.co.nz/

More detailed info of where every cent of our taxes go is available on the treasury website - so there is no conspiracy, you just need to look.

COuld be a seperate discussion in its own.... roughly an 8th (12.5% of our taxes) go to the super highest consumer of our taxes by far.

Edit: Census 2013 says 14.3% of people are 65+ so i guess that, of course you cant draw percentage correlation straight away, but its interesting.

Edited August 19, 2015 by _Ethrty-Andy_

[zero 1160]

COuld be a seperate discussion in its own.... roughly an 8th (12.5% of our taxes) go to the super highest consumer of our taxes by far.

Edit: Census 2013 says 14.3% of people are 65+ so i guess that, of course you cant draw percentage correlation straight away, but its interesting.

Yea, but those saying super is not sustainable are fear mongering if you look at the projections of cost to the country.

Kiwisaver will slowly phase out super anyway as kiwisaver contributions are increased - just like is done in Aussie.

Aussie is up to 9.5% contribution and set to increase to 12% in 2025.

NZ will make kiwisaver compulsory and slowly increase the contributions over time.

[zero 1160]

Your taxes pay for public health, education, Transport networks and the ACC you rort - if fewer people were rorting the tax system average taxes could e reduced?

True, but smaller government would be a much simpler way of having reduced taxes.

If I was king I would increase gst, and greatly reduce income tax.

[Haitoman 110]

I have no problem with the concept of paying tax on imported goods but I object to paying GST twice. Once for the imported goods and once for the internet service I use to buy the goods in the first place.

[_ethrty-Andy_ 2122]

Yea, but those saying super is not sustainable are fear mongering if you look at the projections of cost to the country.

Kiwisaver will slowly phase out super anyway as kiwisaver contributions are increased - just like is done in Aussie.

Aussie is up to 9.5% contribution and set to increase to 12% in 2025.

NZ will make kiwisaver compulsory and slowly increase the contributions over time.

Not sure what your point is here... you dont opt out of Super by opting in to Kiwisaver...

I am not looking forward to the day Kiwisaver is compulsary.

Those that it will benefit are already in it, and I will admit for the vast majority of people its a great scheme.

However, one of the few brackets it doesnt benefit is the one I am in, 40 years off retirement but already own my home.

In my case, it will hold me back from where I want to be in 10-20 years time if it came in now.

In any case, Kiwis should have the freedom to continue building thier own brighter future, not rely on some fat cat i dont know.

Make Kiwisaver comulsory and in effect you have increased taxes and super, with a bunch of investment houses clipping the ticket

Edited August 19, 2015 by _Ethrty-Andy_

[MattA 162]

Arguing on the interweb is like wining gold at the special Olympics.................. I'll let you all finish that as you see fit.

Apologies to anyone I've just offended, I'm not very good at PC.

[CamB 48]

Lots of subjective claptrap and rubbish arguments being bandied around on here .

...

Your taxes pay for public health, education, Transport networks and the ACC you rort - if fewer people were rorting the tax system average taxes could e reduced?

I agree with the last point. On an international basis, I reckon we actually look pretty good on a tax (quite low) vs outcomes (quite good) basis.

If the first point in any way refers to me, I wasn't saying private individuals shouldn't pay a clearance fee (or GST or duty), I am asking why the clearance fee is so high compared to everywhere else. For a government which is doing a pretty reasonable job in pursuing efficiency, customs clearance charges look to be out of line to elsewhere and if we are looking to match other countries' import thresholds then we should match their fees too. Looking at other countries, $10 looks reasonable. $50 does not.

[Haitoman 110]

Lame argument , you pay GST on your internet connection to have a internet connection , just like you pay GST on petrol to drive your car to the mall to buy sh*t.

In neither case are you paying double GST , you are paying for two goods or services.

The issue is about ONLINE shopping which can't be done without an internet connection. Shopping at the mall can however be done by walking there.

[_ethrty-Andy_ 2122]

The issue is about ONLINE shopping which can't be done without an internet connection. Shopping at the mall can however be done by walking there.

fortunately i payed GST on my bus fare and on the food i ate to get the energy to walk there.

[CamB 48]

However, one of the few brackets it doesnt benefit is the one I am in, 40 years off retirement but already own my home.

In my case, it will hold me back from where I want to be in 10-20 years time if it came in now.

In any case, Kiwis should have the freedom to continue building thier own brighter future, not rely on some fat cat i dont know.

Make Kiwisaver comulsory and in effect you have increased taxes and super, with a bunch of investment houses clipping the ticket

Own your own home with or without mortgage?

I am not in KiwiSaver for 2 reasons. The first is quite specific (the terms of my employment mean I would effectively pay the employer matching), but the second is because as I have a mortgage my view is any cash I pay down the mortgage with is like a AAA rated 5-6% cash (post tax) return. AAA rated as I definitely owe the bank, and post tax return as I pay the interest out of post tax earnings. I can't beat that as a risk free return, but if I had employer matching KiwiSaver would be better. I will either join KiwiSaver or invest in some sort of fund(s) once the mortgage is done (I need to think through the maths on govt contributions vs flexibility outside KiwiSaver given I pay my own employer contribution). The fat cats know what they are doing and are quite well regulated now. It's worth doing research on returns for different funds, and also understanding the difference in risk and return profile and what is appropriate for people of different ages.

But I disagree on "increasing tax and super". The point of KiwiSaver is to build a defined benefit and reduce the future (unmanageable) tax burden. Super is going to go down eventually (or the age get pushed out). For those who can afford to be in KiwiSaver, it's a good deal. Assuming you get the govt contribution and employer matching very few people are good enough at investing or making some other investment decision (eg investment properties) to beat a (risk free) doubling of their investment in the first year. Risk free is the key.

A bit rambly sorry, but hopefully the point makes sense.

Edited August 20, 2015 by CamB

[_ethrty-Andy_ 2122]

Own your own home with or without mortgage?

I am not in KiwiSaver for 2 reasons. The first is quite specific (the terms of my employment mean I would effectively pay the employer matching), but the second is because as I have a mortgage my view is any cash I pay down the mortgage with is like a AAA rated 5-6% cash (post tax) return. AAA rated as I definitely owe the bank, and post tax return as I pay the interest out of post tax earnings. I can't beat that as a risk free return, but if I had employer matching KiwiSaver would be better. I will either join KiwiSaver or invest in some sort of fund(s) once the mortgage is done (I need to think through the maths on govt contributions vs flexibility outside KiwiSaver given I pay my own employer contribution). The fat cats know what they are doing and are quite well regulated now. It's worth doing research on returns for different funds, and also understanding the difference in risk and return profile and what is appropriate for people of different ages.

But I disagree on "increasing tax and super". The point of KiwiSaver is to build a defined benefit and reduce the future (unmanageable) tax burden. Super is going to go down eventually (or the age get pushed out). For those who can afford to be in KiwiSaver, it's a good deal. Assuming you get the govt contribution and employer matching very few people are good enough at investing or making some other investment decision (eg investment properties) to beat a (risk free) doubling of their investment in the first year. Risk free is the key.

A bit rambly sorry, but hopefully the point makes sense.

Well the bank owns about half now.

Doubling your coin from your employer is great on paper. in reality, often doesnt check out, your employer is not silly when they are preparing your renumeration package, regardless of if you are CEO or bottom of the barrel. your employer is meeting thier obligations by "matching" what you are putting in, in reality, they just didnt give this to you in the first place.

Combine this with the fact that your investment is likely to only keep up with inflation over the long term for most conservative funds (which is essentially the definition of inflation if you think about it), while growth funds have higher risk which in most cases do not match the level of risk the people they are targeted at can afford if it all goes pear shaped.

On the other hand, using your contributions to pay down your credit card, car loan or personal loan that is costing you 20% or your home loan that is costing 5-7%, kiwisave doesnt stack up.

Reasons to be in:

• you have poor financial literacy and dont understand why you should be saving for the future ie you spend every dollar in your pocket every week
• you do not own your own home yet and do not intend to for 5 years.
• only have small amount of debt, or only interest free debt (eg student loan)
• 55-60+ years old.

Otherwise, you are better off building your own future in most cases.

**note i am not qualfied advisor. however should you choose to use a qualified one, have in the back of your mind who pays them to help you.

Edited August 20, 2015 by _Ethrty-Andy_