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Netflix tax – another one for you peasants

Written By: - Date published: 2:30 pm, April 11th, 2016 - 20 comments
Categories: john key, tax - Tags: , ,

Remember when Key used to say that National wouldn’t introduce new taxes? That National was a party to remove taxes, not create them? That’s not going so well – At least 15 new taxes under National. National’s base have been strangely silent on this.

And there’s yet more to come – ‘Netflix tax’ a sure thing, says specialist

Under current law, intangible goods such as services, media or software purchased from an overseas online retailer don’t fall under the scope of the 15 per cent GST tax.

If the bill goes through, it would see overseas service suppliers, above a threshold of $60,000 revenue per year in New Zealand, having to register for GST here, and charge it to consumers.

So while Key is fighting to make sure our country remains a haven for his rich mates, he’s about to hit you and I with yet another tax. I don’t have a problem with taxes myself, but I do take issue with the hypocrisy.

20 comments on “Netflix tax – another one for you peasants ”

  1. Henry Filth 1

    New Zealand GST isn’t paid by the purchaser if the goods or services are supplied outside New Zealand.

    So if you buy something outside New Zealand, but the goods or services are supplied in New Zealand, shouldn’t you pay New Zealand GST on them?

    It seems simple enough in principle.

    • Et Tu Brute 1.1

      That is the law. So it isn’t a new tax. It is an old tax which isn’t enforced very well because when it was designed we didn’t have the internet and the phenomena of online shopping as we have now. So we currently have a loophole where tax revenue isn’t being collected. Loopholes should be closed shouldn’t they? I mean these foreign companies are selling into New Zealand but they’re not otherwise paying taxes here. And we have a sales tax for a reason; to raise revenue off the sale of goods and services. This is nothing more than a loophole that needs closing.

      • McFlock 1.1.1

        If it’s the current law, why do they need to put a bill through parliament?

        • Et Tu Brute

          The bill isn’t so much that the tax should be paid. The bill regards the collection of the tax. The Goods and Services Tax Act says essentially, with certain conditions, that imports should be charged GST at the border. Internet services don’t cross the border in the traditional sense so don’t get intercepted by Customs. So the method of collection is being updated as technology changes.

          • McFlock


            And road user charges were a new tax introduced as technology changed.

            Suddenly a whole pile of stuff that was previously untaxed has a law change to make it taxed. That is a new tax.

          • Draco T Bastard

            I agree that it’s a loophole that they’re trying to close but the best way to close it would be to drop GST. Considering that GST is massively regressive it’s also the best option for NZ anyway.

      • Henry Filth 1.1.2

        G*d help us when they start trying to figure out how to close the loophole. We have enough poorly-drafted legislation as it is.

      • nadis 1.1.3

        It’s not a loophole. It’s a policy by Customs that they dont collect the GST on goods worth less than $750. But technically, GST is still payable on the $10 of chocolate you buy overseas and bring into NZ. And obviously they dont have the technology to collect GST on internet enabled goods and services imported from offshore.

        I’m still yet to hear a coherent explanation on how NZ will force the likes of Amazon, Google plus 500,000 other internet merchants to collect GST and forward it on to NZ. They may choose to that but I cant see any meaningful way to compel them to do so.

  2. Richard@Down South 2

    Yeah… nah… Do you really think companies like Steam, Blizzard, etc, who dont physically operate (only online) in NZ will do this? *facepalm*

    • Henry Filth 2.1

      Oh, I suppose that we’ll get round the GST collection issue by a poorly-designed process whereby international bank/card transactions are somehow automatically taxed.

  3. Lanthanide 3

    John Key said it’s not a new tax, because it’s just extending an existing tax to a class of products that it should have covered anyway.

  4. Draco T Bastard 4

    While it’s not anew tax NZ retailers still won’t be able to compete on price anyway which is why this government is doing this.

    Basically, the retailers could compete if they marketed to the rest of the world as the online marketers around the rest of the world are doing. They don’t do that though. They still stupidly build physical stores and sell only to the local market. And if they do sell online they charge huge amounts to ship the goods.

    I buy offshore, get the goods in a similar time to buying in NZ and I get free delivery. And even with GST included it’s still going to be cheaper.

    Really, this move is National catering to it’s base who’ve been whinging that they can’t compete because of GST. But the real reason why they can’t compete is because they’re stupid.

    • Et Tu Brute 4.1

      Shipping from New Zealand is very expensive and we just don’t have the scale. This isn’t a political point, but notice how NZ Post here spent the last decade building up a retail bank while postal services overseas were racing to re-structure and develop themselves into parcel and online distribution specialists. We would be in a very different situation today if the money and time had been put into this rather than the finance industry.

      • Draco T Bastard 4.1.1

        Shipping from New Zealand is very expensive and we just don’t have the scale.

        But if they did ship from NZ we would have the scale. Same as Britain has the scale to ship to NZ. An entire 7 billion people to possibly ship to gives the scale.

        This isn’t a political point, but notice how NZ Post here spent the last decade building up a retail bank while postal services overseas were racing to re-structure and develop themselves into parcel and online distribution specialists.

        That just it. NZPost hasn’t been building up a retail bank. If they had the bank wouldn’t need $100m of capital injection.

        And on the postal/courier side they’ve actually outsourcing.

        What we see here is the cultural cringe that seems endemic to NZ. For some reason we just don’t believe that we’re as good as the rest of the world. National doesn’t help with their sucking up to rich foreigners.

    • Henry Filth 4.2

      It always has been cheaper. It’s just easier now, with the internet and cards.

      I seem to remember having to pay sales tax on some things which I picked up from Customs a long time ago.

      But didn’t we decide that there was a threshold below which collecting GST on imports was not economic? Cost more to collect the tax than the tax was worth?

      I rather think time may have caught up on that one. . .

    • Cricklewood 4.3

      That’s exactly right, take children’s shoes. I can go into a store here and spend $80 or I can shop from a UK based site and pay $35 including delivery and vat for the exact same shoe.
      I’m not getting them from a big box store in the UK either it’s a small independent shop even if they manage to apply gst it won be anywhere near enough..

  5. Macro 5

    If Key made an effort to actually ensure the rich paid their way in this country – and not withstanding anything English and Farrar say on this subject – they don’t! * Then he wouldn’t have to try and implement a stupid tax on online overseas purchases, and try and get overseas companies to forward monies collected to NZ! Overseas companies would more likely bar their product from being sold to NZ, than to have to worry about a trivial amount and the incumbent compliance costs!

    *For the top 10% of income earners in NZ
    “This group earns 30% of the income, has 50% or more of the wealth, and pays 43% of the net tax. Is that an outrage?”

    • So while Key is fighting to make sure our country remains a haven for his rich mates, he’s about to hit you and I with yet another tax.

      Not just a tax haven. Key and his pals weasel out of most of the taxes they ought to be paying, it’s only saps like us on PAYE who pay the full whack. If the average rich prick’s accountant had a fit of moral scruple and informed Mr Prick he should pay all the taxes he owes instead of paying an accountant to come up with ever-more-devious ways of “arranging his affairs” to avoid them, said prick would have a new accountant the same day.

      The only genuine answer to why Key is planning to close loopholes for ordinary people while keeping them open for him and his mates is “Because he can.”

      • Draco T Bastard 5.1.1

        The only genuine answer to why Key is planning to close loopholes for ordinary people while keeping them open for him and his mates is “Because he can.”


  6. DH 6

    It’s an interesting proposition and I’d ask what’s really behind it. How can it be enforced? They couldn’t bring charges against the supplier. Overseas suppliers can’t be made subject to NZ domestic laws so I’d initially think any action taken for an offence would be against the buyer. But how could they prove the buyer knew the supplier was above the $60k threshold? How can they even find out what the suppliers are turning over?

    Follow this through and it leads to a law requiring ISPs to block overseas content providers if they don’t charge GST, which in many cases would effectively be a block on most of those providers. Few would be interested in setting up their systems to charge GST just for little old NZ so the likes of Sky will get their monopolies back.

    I get the feeling this isn’t about protecting the tax base.

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