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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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Proof that politicians are idiots

12 July 2018

I've written several columns on this whole issue of the "Amazon Tax" and in each one I have suggested that the government is dreaming if it thinks overseas companies will play ball.

It makes no sense to assume that companies in any other country, who do not have a presence right here in NZ, will opt to become unpaid tax collectors on behalf of our government.

Never the less, NZ seems hell-bent on pursuing this lunacy and Australia has already implemented such a system.

But oh... hang on, it seems that (as I predicted), offshore companies are simply saying "no way, forget it, we're not playing ball".

This Stuff story reports that "International online shipping giants" are ignoring the diktats of the ATO (Australian Taxation Office) and refusing to add GST to the prices they charge Aussies who shop with them.

Quelle surprise?

I think not, nobody in their right mind would have expected anything other than a trivial level of compliance.

How arrogant of NZ and Australian governments to assume that their power extended beyond their own geographical borders.

How naive they are to expect that offshore businesses, whose sole responsibility is to the interests of their shareholders, will incur huge costs to act as unpaid tax collectors for no benefit. Indeed, exactly the opposite, for any company which does impose the GST will automatically be at a price-disadvantage in the marketplace.

It does gravely concern me that the future of this country is in the hands of people who honestly believed that:

  • a) this was a good idea
  • b) this was ever going to work

Maybe this goes some way towards explaining why the present NZ government is also doing dumb stuff like offering low-cost housing to families on $180K per year, the only caveat being that they don't flick it off for a quick capital gain in less than three years.

Even Amazon, the company after which the tax is named, has dodged the Australian regulations by simply opting only to supply Australian customers from its Australian warehouse. This means that the range of inventory is massively reduced when compared to the international list of products they normally sell. This means that if Aussies can't find what they're looking for on the Aussie Amazon site, they'll probably go to some other offshore online retailer and the ATO still misses out on the GST.

As for New Zealand, Amazon has basically said "we won't sell to you if you implement the tax" so we'd also be hugely disadvantaged, for no fiscal gain to our tax coffers.

Bully-boy tactics may work just fine and dandy when it comes to extracting taxes from those over whom you can exert some punitive measures such as fines or terms of imprisonment (ie: regular Kiwis) but try it in the field of international commerce and you will just look like the foolish, naive incompetents that you so clearly are.

And that's all I have to say about that.

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