New GST rules announced to create a level laying field
New rules for GST on low-value imported goods will create a level playing field with international and domestic retailers.
New Zealand’s Minister for Revenue stated that a bill amending the act will be introduced this year, with the changes implemented from 1 October 2019.
The amendments will require offshore suppliers to register, collect and return New Zealand GST on goods valued at or below $1000 that are supplied to consumers in New Zealand.
The rules will protect the 26,000 small businesses that employ more than 62,000 people in the retail sector.
Small businesses will no longer have to compete with foreign firms selling the same product into New Zealand’s market without collecting GST. The new GST rules will protect New Zealand’s domestic interests by promoting fairer business competition.
The new rules will improve the integrity of New Zealand’s tax system and avoid losing a significant amount of tax revenue. The government intends to make offshore
suppliers collect GST on low value goods at the moment of sale. In return, buyers of these goods will no longer pay Customs tariffs or border security and biosecurity fees. This will simplify compliance and administration costs at the border.
The rules have been endorsed by the Tax Working Group and share similarities with Australian and EU approaches.