Labour has screwed up again, talking big, this time about their so-called Amazon tax.
Well Amazon has a message for the government and it is GFY. Quote:
Doubt has been cast over a plan to make foreign firms levy GST on all internet shopping purchases after retail giant Amazon said it would not play ball in Australia.
A New Zealand tax change – which has been expected take effect in October next year – would end the current situation angering local retailers, under which most goods valued at less than $400 can be bought online from overseas tax-free.
Australia plans to become the first country in the world to require big foreign firms to levy GST on all internet sales to consumers, with the law change due to take effect there from July this year.
But Amazon in a surprise move said on Thursday that rather than levying and collecting the tax, it would instead block Australians from buying from its overseas websites, which includes its main Amazon.com store.
From July, Australians will only be able buy goods from Amazon’s smaller Australian store, which opened last year. It offers a narrower range of goods at what are often higher prices and does charge GST.
Amazon would be complying with Australia’s new tax law by blocking Australians from its overseas stores – but not in the way Australian consumers or governments on either side of the Tasman might want.
Amazon does not yet operate an online store in New Zealand. End quote.
And is unlikely to operate one here. They will follow what they have done to Australia and the cash windfall the government was expecting will evaporate.
Essentially Amazon has said they don’t want to play. Quote:
That means that Amazon could be completely closed to Kiwi shoppers, if the New Zealand government pressed ahead with the GST change and Amazon took the same approach here that it has announced in Australia.
Satya Marar, a spokesman for the Taxpayers Union lobby group, said Amazon’s move put the New Zealand government’s plan in peril.
“If this happens in New Zealand, Kiwis will be denied access to about 500 million products, most of which are unavailable locally.” End quote.
Some of us will get around the issue, it might add a couple more steps but it certainly won’t stop me. But it will stop the vast majority of Kiwi shoppers. Quote:
But Amazon’s stance is more problematic, given its size.
The New Zealand government is still consulting over its proposed GST change, with public submissions due by June 29.
But Revenue Minister Stuart Nash appeared to already be counting the pennies in the May Budget.
He indicated the tax change was definite and was likely to raise $218 million over four years, with that revenue stream “increasing each year as online shopping continues to grow”.
Officials made that calculation on the assumption that foreign firms accounting for three-quarters of overseas internet purchases would levy GST as requested.But the loss of Amazon sales could make a big hole in that forecast.
Nash was not available for comment on implications of the developments in Australia. End quote.
Oops. Yet again the law of unintended consequences. Another case of a lack of joined up thinking from Labour.