eFairnessNZ

#eFairnessNZ – closing the GST loophole


New Zealand is currently seriously disadvantaged by a loophole that means that people do not pay GST or duty on low-value purchases (generally goods less than $400 in value) when they buy from foreign websites. This creates a reverse tariff which unfairly discriminates against Kiwi retailers. Booksellers NZ are working hard alongside Retail NZ to level the playing field for local retailers including our membership bookstores.  
 
Booksellers NZ firmly believes it is the responsibility of parliament to ensure GST is a universal tax by requiring all retailers – whether they operate online, in bricks-and-mortar stores, or a combination of both – to fulfil their obligation to collect sales tax.
 
This is neither a new tax nor special treatment for independent bookstores – it is an equitable and consistent enforcement of existing GST laws. 
 
Locally owned businesses have far greater positive economic impact on their communities and are largely responsible for our communities retaining their unique characteristics. The Here’s what you just did flier lists 10 ways that your customers contribute to the infrastructure of their community by shopping locally. The current de minimis threshold enables offshore online retailers a 15 percent competitive edge over local businesses and contributes nothing to the sustainability of the New Zealand economy. 
 
The Government is missing out on at least $200 million a year in revenue from low value goods, not counting GST that would otherwise be paid on cross-border services and digital downloads delivered into New Zealand. That's a huge amount of tax money!
What is GST Fairness? (Also called eFairness)
 
E-Fairness, or sales tax fairness, calls for the equitable enforcement of GST as a universal tax. Currently, bricks-and-mortar retailers are required to collect and remit sales tax on customer purchases, while offshore online retailers are allowed to sell customers the same products with no responsibility to collect GST if it falls below the existing de minimis threshold. This places local retailers at a severe disadvantage and has prompted Booksellers NZ to act on behalf of our members.
 
Booksellers NZ and Retail NZ #eFairnessNZ campaign 
 
In April 2015 Retail NZ and Booksellers NZ are launching a #eFairnessNZ campaign to encourage the government to take urgent action to close the existing de minimis loophole – and we need your help. 
 
What can booksellers do?
 
Write to your local MP and let them know that you support eFairness in New Zealand: tell them how the existing GST loop hole is impairing the progress of your store and the financial and cultural well-being of your local community. We have also supplied a helpful list matching local bookstores to their local MP's. (Please note this list is as accurate and up to date as possible but may contain some errors.)
 
Booksellers NZ have provided the eFairness Action Kit to make this outreach easier.
 

E-Fairness Action Kit

What does Government need to do?
  • Require overseas companies to register for GST, and collect the tax just like any other retailer does.
  • Introduce a lower threshold for low value goods or abolish the threshold - where GST and duty has not been pre-paid, this should be collected at the border before the items are released.
  • Levy a fee on goods worth more than $25 to cover the cost of Customs and quarantine clearance, as happens in most other countries.
Key things to know
  • New Zealand is out of step with most other countries.
  • Canada has a CAD 20 threshold and the UK has a GBP 15 threshold. Tax is collected on all imports over these levels, as well as a fee to cover the costs of Customs clearance.
  • The Government is missing out on huge amounts of revenue as a result of the current loophole – enough to fund at least 4,345 new first-year primary teachers or more than 9,000 hip replacements.
  • The current loophole makes it hard for Kiwi retailers to compete with foreign websites that don't contribute to New Zealand.
  • The Government is looking at this issue through the OECD but most countries already charge tax on low value items crossing the border. The Government can and should take urgent action to close the loophole.
How can you help?
  • Please write urgently to your local MP. Please let them know how this issue is impacting your business and your community and what it would mean for your business and employees if the loophole was fixed. Booksellers NZ have provided an MP letter template on our website. Adjust this template to suit your store and your local MP.
  • Please use social media to tell the world about the impacts on your business. Use the #eFairnessNZ hashtag to tell your story.
  • Please tell your customers about how important it is to allow New Zealand stores to survive in a competitive world.
  • Check out the media links, template letters, submissions and other handy tools that Retail NZ have provided on their website to help engage your customers and communities in the debate: www.retail.kiwi/eFairnessNZ
  • Add your signature to the online community of people supporting changehttp://goo.gl/vfA8FY
What can the Government buy with $200 million?  
  • 4,345 new first-year primary school teachers
  • 9,091 hip replacements
  • six Radio New Zealands
  • 1,484 backbench MP salaries
  • 396,747 weeks of paid parental leave
Resources for bookstores
  • Local MP Letter Template: Click through, or find this in the list of file attachments below
  • Local Press Release TemplateClick through, or find this in the list of file attachments below
  • Find Your Local MP: We have created a document that lists local and MPs and their addresses and matches them to the relevant membership bookstores. Please note this list is as accurate and up to date as possible but could contain some errors.  
 
#eFairnessNZ Logos
Other links
 
For more information, contact: lincoln.gould@booksellers.co.nz, tel 04 472 1908

Tax Adjustments Good but Should Come Earlier – Retail NZ

Retail NZ has welcomed the tax adjustments proposed in today’s Budget, but says they should kick in earlier.
 
'The changes announced today will mean consumers will be allowed to keep more of their own money,' Retail NZ’s General Manager for Public Affairs said today. 'It’s a good thing if consumers have more money in their pockets, because they’ll be able to choose whether to go shopping, save up for something, or repay debt. Overall though, the tax cuts announced in the Budget, although small, are likely to be good for the retail sector, which is facing a number of challenges at present.
 

Australian Government leads the way on GST - Time for NZ to follow suit

The Australian Government has today introduced legislation to the House of Representatives that will require foreign retailers and online marketplaces to register for Australian GST, and Retail NZ says it’s time NZ’s National-led
Government followed suit.
 

Kiwi retailers hit both ways under Aussie GST move

With Australia moving to collect tax on low value goods beginning July 1 next year, Kiwi retailers are facing the likelihood of being hit both ways across the border on the sale of low value goods, according to Retail NZ.

GST Move Good for Big Kiwi Tech Firms But Government Still Missing Out on Revenue

New legislation requiring international firms to charge GST when selling digital services to New Zealanders comes into force tomorrow. Retail NZ and Booksellers NZ say that, while this is good news for big tech firms like Spark and Sky TV, the Government is missing the opportunity to level the playing field for retailers and rake in extra revenue from low value goods.
 

New GST Bill Suits Big Business Only

There is nothing for small businesses and their communities in the Bill being introduced which requires foreign online retailers to collect GST on digital and intangible services according to Booksellers NZ CEO, Lincoln Gould.
 
“Minister McClay talks of fairness and creating a level playing field. The Bill goes only halfway to  rectifying the GST problem with foreign retailers and benefits only big businesses engaged in selling videos, music and e-books,” says Gould.
 

GST on online services - levelling the playing field

Revenue Minister Todd McClay says measures proposed in a tax bill introduced today are about fairness and equity.
 
“It is about creating a level playing field for collecting GST and putting New Zealand businesses and jobs ahead of the interests of overseas suppliers”, says Mr McClay.
 

Australia to reduce GST de minimis to zero?

Federal Government and State Treasurers expect to eliminate GST Low Value Threshold on offshore retail purchases
 
On Friday morning State Treasurers will be meeting with Federal Treasurer Joe Hockey to discuss reform to the GST. It is being widely reported that the Federal Government and State Treasurers will agree to eliminate the Low Value Threshold on online offshore purchases – bringing tax fairness to the collection of GST.
 

Retailers cautiously welcome Government GST moves, but urge faster action on goods

Retail NZ has cautiously welcomed the release of a Government discussion paper that proposes foreign websites selling digital services to New Zealanders pay GST – but has urged faster action on dealing with low value goods as well.