Aardvark DailyNew Zealand's longest-running online daily news and commentary publication, now in its 23rd year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.
Content copyright © 1995 - 2017 to Bruce Simpson (aka Aardvark), the logo was kindly created for Aardvark Daily by the folks at aardvark.co.uk
Please visit the sponsor!
Last week there were claims by a member of the new Labour-led government that NZ would be following Australia's lead and introducing an "Amazon tax".
What is that?
Well here in NZ it's the "Netflix Tax"... a diktat by government that overseas companies who sell more than the minimum threshold worth of products or services in to NZ must act as unpaid tax collectors.
Here in NZ it's called the "Netflix tax" because Netflix is one of the very few companies who have agreed to collect GST on their NZ sales and forward that money to the IRD, so as to keep the peace.
Now I get *very* annoyed when I hear an NZ government claiming that they want to force all overseas companies to act as unpaid tax collectors for them in the area of GST and I'll tell you why.
GST is a consumer tax. It's a tax that is not paid by companies or traders, it's paid by you and I, the people who are the final link in the purchase chain.
Although the government is trying to convince the naive and stupid amongst us that companies like Amazon and AliExpress should pay GST like NZ-based retailers, I suspect that most Aardvark readers are clever enough to realise that this is utter bullshirt.
What the government is actually saying is that they want Kiwis to be taxed on all personal imports.
Now in and of itself, that isn't a bad thing. It does level the playing field and ensure that the crown's coffers are not deficient by the amount of GST presently lost on small personal imports. However, to suggest that it's the offshore companies which are cheating the tax and that they are the ones who should be paying it is utterly wrong.
I've seen a wide range of estimates as to how much tax revenue (GST) is lost due to low-value personal imports but it's not actually a snot load of money.
In fact, it pales into insignificance against the amount of corporate tax that companies such as Apple, Facebook, Google and others should rightly be paying to the government as a result of sales into NZ.
Yet strangely enough... successive governments have opted to pursue ways of extracting this much smaller amount of tax from NZers (GST on personal imports) instead of going after the "real money" associated with the profit-shifting that these big corporates have been doing for many years.
Why is that?
Is it because they know that as individuals, the average Kiwi consumer has no power to rebel against being pinged for GST on their imports? Compare that to the awe-inspiring levels of legal, political and financial pressure that these multinational corporates can bring to bear on any government that seeks to extract their fair pound of flesh from massive profits.
Yes, I can only think that the reason our governments are targeting the relatively trivial amounts of GST being lost on personal imports rather than the huge sums lost to corporate greed and deceit is fear.
How sad it is that we have governments that lack the testicular fortitude to stand up to these international corporate crooks -- and instead opts to rape their own citizens for a few extra shekels instead.
I've heard governments say "we can't do anything about the Apples, Googles and Facebooks who profit-shift their gains out of NZ" -- but their insistence on trying to raid the wallets of Kiwi consumers while ignoring the corporate tax rort is somewhat like deciding to repaint the Titanic and just ignoring the fact that it has a huge hole in the side caused by an iceberg. I can imagine what the government would say in such a case: "Oh, we can't do anything about the fact that we have a huge hole but we can carry on painting so we shall just do that".
As it stands, the NZ government is looking after the interests of foreign corporates (by doing nothing to tax their NZ profits) whilst screwing the very people they are elected to serve by seeking ways to levy GST on even the smallest import.
That Labour would come out so soon after election and proudly crow about introducing an "Amazon Tax" without any plans to deal to the corporate crooks shows that despite their claims to be working for the little guy, they're no different to the government that they have replaced.
Please visit the sponsor!
Have your say in the Aardvark Forums.