“E-fairness “called for in the face of possible GS

“E-fairness “called for in the face of possible GST Increase

Any increase in the GST rate in New Zealand will further disadvantage local booksellers competing against international online book sellers, such as Amazon, who don’t pay tax to the local economy.

“Booksellers here are already facing an uneven contest against Amazon and other off-shore web based booksellers,” says Booksellers New Zealand Chairman, Hamish Wright

“Buyers in New Zealand are not required to pay GST on their on-line purchases from overseas, and no import duty if the order is below $400, which of course most book orders are.

“It is true that freight costs from off shore warehouses offsets the GST issue somewhat, but if the GST rate goes to 15% then effectively New Zealand tax payers are forfeiting another 2.5% of revenue to Amazon and others for doing nothing,” said Mr Wright.

Booksellers CEO, Lincoln Gould says the non-payment of sales tax by off online book sellers was highlighted at a conference of the American Booksellers Association (ABA) in San Jose last week attended by Wright and himself.

“We have been discussing the issue with the New Zealand Government,. But we had no idea of the extent of problem in the United States where tax avoidance seems to be the name of the game by online booksellers, selling across state borders.

An “e-fairness campaign” has been launch by the ABA to persuade state legislators to require online sellers to collect sales tax. Five states, including New York Colorado, New Mexico, Vermont, and Virginia, have introduced e-fairness legislation with others are considering similar action.

“In California alone, it is estimated that online retailers costs the state $458 million annually which for a state which is pretty hard pressed for finances, is quite a hole,” said Gould.

“We are unsure of the exact amount of books bought by New Zealanders from the likes of Amazon - figures have ranged between $80 and $100 million for Australia and New Zealand– but the effect is a double whammy – the Government loses revenue that could be spent on resources and infrastructure elsewhere and New Zealand book shops face an extra unnecessary hurdle in a difficult economic climate.”

Booksellers New Zealand intends to continue to press its case for “e-fairness” as part of the consultation process the government has announced regarding the possible increase in GST.

ENDS