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Government backtracks on GST for internet shopping

Newshub logoNewshub 6 days ago Isobel Ewing

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Revenue Minister Stuart Nash has perhaps been too enthusiastic in promising to add GST to internet shopping.

On Wednesday, he said the Government will "absolutely" move to apply GST to online purchases from overseas, but by the end of the day, Finance Minister Grant Robertson was pulling back.

New Zealanders spend around $3.4 billion a year on online goods and services, but New Zealand websites' share of this is rapidly declining.

Fifty-five percent of online spending is now with New Zealand firms, and that's expected to drop below 50 percent by next year.

Mr Nash said on Wednesday morning the National Government did not go far enough when it introduced the 'Netflix tax' on services and purchases like movies, ebooks and music. He said a tax on goods will "absolutely" happen.

The retail industry began celebrating.

The government has confirmed they will apply GST to online purchases from overseas. © Newshub. The government has confirmed they will apply GST to online purchases from overseas. Greg Harford from Retail NZ said it was "great news" that would level the playing field for brick and mortar retailers. He estimates the tax may bring in up to $235 million a year, rising to $935m within nine years, as the e-commerce sector grows.

But by the middle of the day, the Government's story was changing. 

Mr Nash pulled out of an interview with Newshub and wasn't available to provide detail on the tax plans.

Then Mr Robertson stepped in to tell Newshub: "I think what the Minister of Revenue was saying was there is still quite a lot of work to be done on it."

Former Minister of Revenue Judith Collins didn't hold back.

"I think he's enthusiastic, and enthusiasm is an excellent thing in a puppy, but possibly a minister needs to be a little less."

The National Government's 'Netflix tax' requires foreign companies to levy GST on all digital services sold to New Zealand, such as streaming television, music and gaming subscriptions.

National refrained from extending the tax to physical goods.

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