Opportunity for business to consider better Customs law

4 March 2015

News release

PwC welcomes opportunity for business to consider better Customs legislation

The New Zealand Customs Service recently undertook a major review of the Customs and Excise Act with the intention of creating a new piece of legislation that will be less prescriptive and more business friendly. Following this, a discussion paper has been released this afternoon with a two month public consultation window.

PwC Partner Eugen Trombitas says, “From a New Zealand Inc perspective, we welcome the rewrite as New Zealand needs modern and progressive Customs legislation that is practical and agile in terms of meeting business and trade needs.

“New Zealand prides itself on having one of the more progressive Customs services in the world. However, our Customs legislation has not kept pace with the digitalisation and globalisation of trade, travel and changes in global business models and practices and a lot has changed since the last rewrite in 1996. Increased trade volumes, more complex supply chains, a greater number of Free Trade Agreements have all contributed to the need for efficiency, reduced trade barriers and lower costs.

“We’re encouraging businesses to consider the rewrite's impact on them – particularly for exporters, importers, Customs brokers and businesses changing their supply chains. This is their opportunity to have their say and help achieve a Customs framework that promotes operational efficiency, supports the competitiveness of NZ businesses and helps create economic value for New Zealand,” he says.

The rewrite is specifically not covering the collection of GST and duty on low value imported goods.

A new Act could be enacted as early as 2016.

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Notes to editors:

This new legislation aims to bridge that gap in digital and technological advancements such as electronic clearances and Trade Single Window plus speed of change.

Customs and Excise Act (CEA) has the following current challenges:
•highly prescriptive and disjointed
•can be difficult to amend
•does not allow Government to easily respond to domestic and international border management practices
•does not fully align with business practices and supply chains
•does not allow Government to change its policy settings without substantive amendment to legislation
•lacks purpose or key principles.

The rewrite is designed to deal to the challenges and make it easier. The shift in the new approach to CEA will result in:
•facilitative approach (i.e. not prescriptive) with less legislation and more Customs rules
•less legislation will also remove complexity/ambiguity (currently room for legal disputes and loss of revenue)
•agile and practical framework (adaptable to changes in business practice and law changes)
•framework that promotes operational efficiency and supports New Zealand business competitiveness
•legislation/framework that keeps pace with technological change
•foundation that is more efficient
•creating economic value for New Zealand.

Businesses require:
•simple and efficient processes (i.e. how do I move goods from A to B in quickest and least costly way)
•technology/digital enabled framework and processes
•certainty around border transactions
•removal of barriers to trade and less cost.

CEA has been amended 57 times since 1996, has 308 sections (there are only 88 regulations – this needs to be reversed). New Zealand Customs works under 56 pieces of legislation and 15 further Acts are relevant to border protection.

For more information, please see our latest GST Direct publication available at:
http://www.pwc.co.nz/gst-direct/issue-25-march-2015/

PwC will be producing a follow up business insights publication, which is planned for release early next week.

A summary document is available at: http://www.customs.govt.nz/news/resources/corporate/Documents/CEAct1996Review-Summaryofkeyissues.pdf

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