Article – Jeremy Wilkinson and Megan Gattey

Applying GST to online purchases was the main focus of this afternoons post-cabinet press conference in Wellington.Post-cabinet press conference: Online purchase GST and TPPA

Photo: Jeremy Wilkinson

Applying GST to online purchases was the main focus of this afternoon’s post-cabinet press conference in Wellington.

Currently purchasers of online goods only have to pay GST if their order is more than $400.

“I think you should have to pay for online services. There are about 12 jurisdictions around the world that do that, including Europe. I completely understand why people want to buy online. I just think it should be even and fair with New Zealand retailers.”

In simple terms, Key said paying GST in advance meant there would be no reason for items to be held up at the border.

The government would like to be able to apply GST to both services and goods, but it will take longer to implement the goods aspect because the officials need to work through the logistics, he said.

“We want to ultimately be able to apply GST to services and goods.

Netflix and iTunes users will soon be charged GST for the services, but Key said this could not be called a “new” tax.

“New Zealanders have always paid GST. The only change is that the purchasing is happening online.”

Key also discussed the TPPA, denying reports that the deal has been losing momentum recently.

“It’s tantalisingly close but we’re not quite over the line yet,” he said.

Dairy, automobiles and pharmaceuticals were the three principal factors in the TPPA, he said.

“We’re pretty close on them, but there’s one big shove that needs to happen.”

Key said he felt confident the deal would transpire.

“Excuse the pun, but we’ve been a key player the whole way through. We’ve got those last few points to get through, but I think on the whole, it’s looking okay.”

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ENDS

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