Retailers trying to kill off Internet sales

The Herald reports:

The chances of GST being applied to all overseas web-based retail purchases appear more distant after the Government changed tack on a review into tax of online shopping.

The chances are not more distant. They are zero, and have always been zero.

New Zealand consumers can avoid GST on many goods bought for less than $400 on foreign websites, such as online retail giant Amazon.

The Retailers Association wants GST applied to all online purchases to “level the playing field”, saying the current gap in the tax system makes it more difficult for local businesses to compete against their overseas online competitors, while also losing the country up to $300 million in annual GST revenue.

The Retailers Association effectively want someone to un-invent the Internet.

One can have a reasonable debate about whether the $400 threshold is at the right level, but there is no practical way to apply GST to foreign companies unless you impound every letter and parcel at the border. Even then, electronic purchases of music and e-books would not be affected.