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Budget missed an opportunity – Booksellers NZ

16 May, 2013

Budget missed an opportunity – Booksellers NZ

Booksellers NZ is disappointed the Government did not make a budget statement of intent to clean up the $400 million loophole in the collection of GST.

“We asked them back in March to consider making such a statement after we released University of Victoria Research which showed there is a large and growing loss of Government revenue, and a significant dent to the economy from the failure to collect GST on purchases from offshore online retailers,” said Booksellers NZ CEO, Lincoln Gould.

The failure to collect GST from offshore retailers is regarded by booksellers and other retailers as a major threat to competition.

“Offshore retailers can even sell New Zealand published books to New Zealanders without paying GST. It’s the same for all books of course but it means that the local small business faces a 15% price challenge before even thinking about any other competitive advantages that big international retailers have in being able to purchase large quantities of books from publishers,” said Gould.

“We know the IRD and the Customs Department are looking at the issue and recognise that it is a major loophole in the collection of the so called universal tax.

“It would have been a sensible step for the Government to at least state in the budget announcement on tax reforms that it intends to deal with this issue which is hurting small New Zealand businesses up and down the country, not to mention what the government could do with the millions of extra revenue,” said Gould.

Booksellers NZ are the trade association representing more than 400 bookshops.

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