Import tax delay favours online shoppers

  • 30/06/2016
Import tax delay favours online shoppers

Online shoppers can breathe a temporary sigh of relief - the Government is holding off on lowering the threshold for collecting tax on low-value imports.

Customs Minister Nicky Wagner says more work needs to be done on how to effectively collect tax on items purchased from overseas-based online stores.

The volume of low-value goods imports is growing by about 14 percent each year and is expected to double over the next five years.

Customs doesn't currently collect GST and tariff duty if the total tax owed is under $60.

"The current $60 threshold benefits online buyers, but is unfair on our local retailers who pay tariff duty and GST on their bulk shipments," Ms Wagner said.

"The Government acknowledges that a lower threshold would help to level the playing field, but there's no quick or easy solution."

Customs has carried out extensive work and consultation over the past year, but it needs to look in greater detail at potential collection mechanisms options and what the border transaction fees might be.

"Once Customs has a better understanding of the best ways to collect tax for low-value imports, we will look to lower the threshold, potentially from the 2018/19 financial year," Ms Wagner said.

By lowering the threshold too soon, Ms Wagner said there is a risk that goods could be held up at the border needlessly, and the collection costs would exceed the revenue gained.

But Retail NZ is "deeply disappointed" by the Government's decision.

"Its continued inaction places New Zealand retail businesses, especially small businesses, at risk," Retail NZ general manager Greg Harford said.

"It is just not good enough. The reality is that small firms in small town New Zealand are collecting tax for the Government, while massive international retailers like Amazon, Asos and Alibaba are getting away without paying their fair share of taxes."