Government proposals to have GST collected by foreign online retailers selling into New Zealand are, for the most part, welcomed by Booksellers NZ.
The trade association, representing more than 300 bookshops throughout the country, has been lobbying for more than five years to have the government close the GST loophole which allows offshore online retailers a 15% competitive advantage over local retailers.
“The proposals, released by Government today, are largely in line with what we have been asking for, but there is still some confusion which needs to be clarified within the consultation process,” said Lincoln Gould, CEO of Booksellers NZ.
The Government plans to require offshore online retailers supplying “services and intangibles”, to register for GST. However, this would not include “goods” such as books or other low value goods which the government intends to address in a further discussion paper in October.
“We cannot see why the government does not require foreigners to register to collect GST on all online sales into New Zealand. They mention Amazon as one company that would be required to register for GST in relation to sales of digitally supplied services such as films, e-books etc. If online retailers have to collect GST on e-books, why not include printed books, clothing and toys?
“Clearly the Government wants more time to sort out the de minimis issue and the cost of border collection because not all foreign retailers, especially small ones, would register to collect GST. But we will be asking them to consider registration for GST purposes to apply to all an online retailer’s products and services in the first instance,” said Gould.