Wairoa Star, Wairoa East Coast by STUART NASH 10 May 2018
LAST week I announced we intend to follow through with our promise of equalising GST rates when shopping online.
There has always been GST on low value imported goods, but it has been too expensive to collect, which has put our local “brick and mortar” stores at a disadvantage.
This disadvantage extends, of course, to New Zealand companies that make sales over the internet (like, for example, Whitcoulls that has a strong internet presence).
This is not right – why should New Zealand retailers pay 15 percent more than big overseas companies?
This Labour government said we would help local businesses by removing the immediate 15 percent advantage that overseas companies receive by not having to charge GST.
We have to be realistic; this is about economies of scale. And New Zealand retailers are being placed at a disadvantage compared to foreign competitors.
Business associations such as Retailers New Zealand and Booksellers New Zealand have been asking for this for years.
The old regime was uncompetitive and New Zealand businesses knew that.
It is no silver bullet and it won’t stop people purchasing goods and services online, but it will create a fair playing field in which local businesses can compete.
Inland Revenue has many mechanisms to collect this money so there won’t be any avoidance.
This is about making sure New Zealand companies have the opportunity to compete. This will be better for our local economy and provide incentive for kiwis to start business here.