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Aussies go halfway on GST - NZ needs whole job done

Aussies go halfway on GST – New Zealand needs the whole job done.

New Zealand bricks and mortar stores will continue to face unfair competition from foreign online retailers if the NZ Government follows Australia and only closes the GST loophole on sales of digital items such as e-books, films and music.

“The hurt to small businesses such as bookshops will only be fixed by ensuring GST is collected on all online purchases of low value goods such as books,” says Lincoln Gould, Booksellers NZ CEO.

“Prime Minister John Key promised to fix part of the problem in the wake of the recent Netflix controversy. He not only needs to make good on that promise which will help big business but also close the loophole completely and ensure that GST – the so-called universal tax – is applied fairly universally on all purchases from offshore online retailers.”

Booksellers NZ and Retail NZ have joined together in the #eFairnessNZ campaign, with bookstore owners and other retailers informing their local MPs of all parties of the unfair competition that allows foreign online retailers a 15% price advantage over local stores.

“Feedback we have received is that local electorate MPs understand the message that this is a matter of fairness that – unless fixed now – will continue to erode small business confidence and local economies.

“Local employment is adversely affected, the viability of small businesses is stressed. ‘To Let’ signs in shops, small towns and city high streets are fading in the sun and being tattered by the wind as they age with no-one willing to take the risk against the overseas behemoths such as Amazon who are not required to pay their dues.

“We have been talking with Government and officials for some years about this issue and it is now time for the loophole to be closed. The Government knows how to do it by requiring offshore online retailers to register in New Zealand for tax purposes as well as lowering the threshold below which GST is not collected to a bare minimum. The EU has done this, Japan is doing it in October, many American states and South Africa have dealt to this problem.

“An announcement in the budget on 21 May that the loophole will be closed by a specific date, would be the right thing for the Government to do,” said Gould.


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