Cronyist campaign to remove $400 internet sales tax threshold

I last dealt with a bookstore some years ago. I wanted a Sean Hannity book, and the seller charged me about $170 and I had to wait a month at least for delivery. I felt this was pretty poor service, and when I mentioned this, the they didn’t seem to give a damn. Take it or leave it was the response.

So I took it that time, but every subsequent book I bought was purchased over the net for around $50 including express delivery. So I’m no fan of NZ bookstores.

If you buy something off the internet from a seller in another country, as I buy books and various other things, you only pay GST and duty if the value is above $400.

A group saying they represent “small business” and calling themselves by the catchy socialist name of eFairnessNZ is lobbying govt to remove the threshold. Retail NZ and Booksellers are heading the campaign.

EFairnessNZ say the govt is missing out on $200 million of tax / year through not taxing internet purchases below $400. And in an argument these socialist cronyists seem to think is extremely compelling, they point out that this tax would pay for 4,345 school teachers. Retail NZ’s Greg Harford also says-

“The current rules were set in place about twenty-five years ago, certainly before the internet existed. It’s time they were bought into the modern world and bought up to date with the internet age.”

Even if my book costs me $57.50 plus duty it will probably be a lot cheaper still than a retail bookstore. I’ll also remember every time I purchase why I have to pay that extra and who is reponsible. All Mr. Harford’s group is doing is risking a huge public backlash for probably no gain in custom.

I don’t think he can do maths either. It would surprise me if the payroll cost of a school teacher in NZ was as low as $46,000. Seems strange to me that a small business representative would forget about employment overheads which are probably around 25% to 30% per employee at least. Meaning he’d only get a little more than 3000 teachers.



Categories: Economics

Tags: ,

1 reply

  1. He won’t get any more teachers. The reason for the threshold is the cost of collection: below that threshold, the tax costs more to collect that it brings in. So lowering the threshold really means fewer teachers — or under John Key: more borrowing overseas.

    As for NZ bookshops, well they’ve always had big displays and book launchers for the latest leftist fantasy screed like “Dirty Politics” – but you can never get anything that tells anything like the truth, whether it’s Hannity, Coulter, or especially Ian Wishart.

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