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New Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

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The Amazon Tax... again

1 May 2018

Headlines in the media suggest that the government is preparing to roll out its "Amazon Tax".

What can I say?

I've already shown that this attempt to recoup the many millions of dollars in GST revenues lost to personal imports under $400 is like tilting at windmills.

Perhaps crazed by power, the government actually believes that the myriad of online retailers out side of New Zealand will voluntarily comply with its demands that they act as unpaid tax-collectors for this little island nation.

Seriously? What colour is the sky in Wellington?

Sure, some of the big-names such as Amazon may (as Netflix already has) choose to comply but the vast majority of others will likely have little desire or compulsion to do so.

Where is the value for Ali-Express, DX or Banggood to start levying GST on purchases made by NZers?

Why on earth would they put themselves at a price-disadvantage and incur such extra costs when they know full well that their competitors are unlikely to do the same?

And when they choose to thumb their nose at the diktats of the powerless NZ government... what will their censure be?

Nothing of course -- because they operate entirely outside of the NZ Government's jurisdiction.

I really can't believe that the cloth-heads in Wellington believe that thousands of companies around the world are going to jump to comply with the demands of our little banana republic when it comes to calculating, charging, collecting, accumulating and then remitting GST on every purchase made from them by Kiwis.

Perhaps it's simply that our politicians and their advisors honestly believe that the vast majority of personal imports come from Amazon.com. I would not be surprised if that was the case... after all, they've proven many times over that they're hardly the most tech-literate bunch. They're probably blissfully unaware that places like DX, Banggood, GearBest and the raft of other Sino-etailers even exist.

To be honest, I've never actually purchased anything from Amazon.com but I have spent thousands at a long list of Sino-etailers that probably operate well below the wooden-heads' radar.

So what's the plan when someone purchases from an overseas source that doesn't add GST to the bill at checkout time?

Are *all* packages now going to be stopped at the border and have GST levied on them by NZ Customs?

Wow... that will be so expensive that any hope of recouping the lost GST will be eaten up in costs and the whole damned thing will likely end up costing more than it returns. I personally may choose, as an act of protest, to order 100 items from DX at the "$1 including free shipping" price and watch as the costs associated with invoicing and collecting 100 lots of 15 cents a pop causes a world of hurt to this lunatic system.

And what about stuff you might buy from eBay? There are a lot of variables involved in such transactions.

Given the number of unscrupulous types out there, I can see that overseas tax fraud against the NZ government will become rife. A raft of dodgy traders from outside NZ will charge GST on sales to NZ customers and then simply pocket the cash -- forcing the customer to either pay twice or leaving NZ Customs out of pocket.

To be honest, this is one of the most ill-conceived taxes I have ever seen because it will provide huge incentive for non-compliance, offer no benefit to those few companies which do comply and leave Kiwis out of pocket whilst returning a net loss to the government's coffers due to the overheads in processing all those tiny "$1 including free shipping" consignments from non-conforming overseas vendors.

And these people are running the country?

Heaven help us!

Related story (Stuff): Government proposes 'Amazon tax' (1 May, 2018)

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