Online GST rules kick in

Months of work has gone in to enacting a new tax on international online sellers.

GST on purchases less than $1000 comes into force from today for retailers selling products in New Zealand, if they sell more than $60,000 worth of goods here annually.

Trade Me head of marketplace Lisa Stewart says it's been a long time coming.

"It was a decent chunk of work - working with our sellers then and across our site to make sure that all of the changes were on time."

Stewart hopes it evens the playing field for local sellers, and says Trade Me is in a unique position to see how it affects buying habits.

"We've got thousands of international sellers from lots of different markets, so that means we'll be collecting GST from those international sellers for those low-value items."

The change is expected to generate about $130 million in tax a year for the Government. 

Stewart says it's great news for local retailers.

"We're fully supportive of the Government's move to collect GST on low-value imports. We definitely think this will level the online retail playing field for Kiwi businesses."

Consumer NZ said because tariff duties and cost recovery charges will no longer apply to most orders under $1001, items that cost between $400 and $1000 will actually end up costing a bit less than before.

Items under $400 will likely cost more, as they used to be exempt from GST. 

Retail NZ chief executive Greg Harford told The AM Show on Thursday it won't "engender a huge shift in the way people shop", but was necessary to "level the playing field".

"There's been a number of years now where Kiwi retailers have been disadvantaged because they've been having to collect and pay tax on behalf of the Government while their foreign competitors don't. 

"Most people will agree that if you've got a tax it should be levelled on everyone who's playing in a market, because that's the only fair way you can manage a tax system - ultimately, it's a question about the integrity of the tax system."

Amazon UK and Amazon Japan will stop shipping to the country from Sunday.

GST is currently 15 percent. Purchases over $1000 are unaffected, as they were already subject to GST, often collected at the border.