Yesterday’s announcements on GST for digital goods is a mixed bag for New Zealand internet users, according to InternetNZ’s chief executive Jordan Carter, who says the changes announced by Revenue Minister Todd McClay will Kiwis paying GST on many of their transactions online.
Carter says InternetNZ does not have a view on the policy to introduce GST for online transactions, however it does “believe that if this is done, it must be done in a manner that does not stifle online commerce and that is reasonably workable”. Carter says InternetNZ included this advice in a submission on these proposals earlier this year.
Carter says one of the big challenges is how retailers are expected to know that a customer is from New Zealand. Internet Protocol (IP) address information is one manner that a retailer may try to use.
"We strongly advised the Government that using IP addresses as a means for implementing these measures is technically and logically flawed," he explains.
"It's like determining where someone lives based on their city - and sometimes even less accurate than that."
However, Carter says InternetNZ is pleased that the Government has decided on an appropriate threshold for overseas internet-based retailers before GST collection is required.
"We look forward to the Select Committee process to help improve these proposals and ensure they do not have a chilling effect on New Zealanders’ ability to shop online,” he adds.