There is a lot of debate at present over the government’s plans to impose a GST charge on imported goods bought online.
As a retailer I wholeheartedly support this.
As a nation we are losing hundreds of million of dollars a year in lost revenue that helps our country function and develop.
There is talk of GST rising to 17.5 percent, which in some ways is a knee jerk reaction to taxes collected on local sales of goods diminishing. Yes we may get our Net a Porter and Asos purchases tax-free but we will pay more on everything else we buy from petrol to groceries and electricity.
As online shopping increases the revenue needs to be tracked and collected. There has been a fundamental shift in the way we shop and Government need to work out how to adapt.
One of the biggest stumbling blocks appears to be how the transaction is tracked to enable the tax to be collected.
Some websites (like Mr. Porter) will ship DDP meaning they calculate local taxes and duties then pay it on your behalf, this seems to work well.
Most transactions are paid on a credit card or via PayPal. In this electronic age this must be able to be tracked at point of purchase, whoever nails that concept will be a rich man.
Or the seller could control this at the point of purchase, in much the same way that GST is collected and paid now.
One of the challenges with online shopping is that the goods obviously come from all over the world, more radical ideas could be a universal " global tax" on online sales.
Better tracking of the goods once they arrive is also something that could be explored, with mail numbers declining and NZ Post struggling to achieve growth maybe they could become a designated sorting house for all online imports contracting to NZ Customs to retrieve tax.
No one likes paying tax but you don't want to be scuffing your new tax-free Christian Louboutin shoes on a badly maintained sidewalk.