27 March 2002

Another New Tax; Another New Business Compliance Cost

The business sector has reacted strongly against Government proposals to impose a levy on import shipments.

Business NZ Chief Executive Simon Carlaw says the levy is apparently to pay for the processing of GST or duties on imports. The plans were announced recently in a release by Acting Customs Minister Jim Anderton to importers and are currently being considered by a select committee. *

From July, the Government intends to collect a fee of $16 + GST on every commercial import that has a duty or GST liability of more than $50, which will affect most shipments worth over $400.

Mr Carlaw says that will be a major cost imposition on small companies in particular, and asks why business should have to pay for Customs' processing of duties or GST.

"This would be like forcing individuals to pay for the IRD's processing of their GST," Mr Carlaw said.

"About $4 billion GST revenue is currently collected by customs annually, with about 1 million shipments processed by Customs annually - this gives an indication of the scale of operation. It would be a major cost on NZ businesses."

Mr Carlaw said businesses see the plan as a new tax and want it scrapped. Business NZ has been seeking changes to simplify the processing of import documentation and would prefer the Government to focus on this rather than charging business for the current inefficient processes.

*The Foreign Affairs, Defence & Trade Select Committee, considering the Customs and Excise Amendment Bill (No. 4)

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