Overseas online shoppers say no to higher GST

More than 1.76 million New Zealanders have been online shopping using overseas retailers in the past three months – and any move to charge them more in taxes and duties will find half of all adults opposed.

New Zealanders would prefer retailers to become more efficient – and to keep taxes and duties on their overseas online purchases the same or lower.

50.1% say no taxes and duties should be paid on goods bought overseas which have a value of $400 or less, or attract duty of $60 or less. This is the current policy and is now being reviewed by the Government.

Some retailers are arguing that taxes and duties on goods bought overseas should be the same as goods bought in New Zealand.

However, only 21% of New Zealand adults support that, according to a new nationwide Horizon Research survey of 1482 people aged 18+, representing the New Zealand adult population at the last census. The survey’s maximum margin of error is +/- 2.5%.

Save jobs argument unconvincing

Even when asked if the current difference in tax and duty treatment of goods purchased online from overseas and goods purchased in New Zealand were to make New Zealand retailers uncompetitive, close shops or reduce jobs, support for applying the same taxes and duties on New Zealand and overseas purchases only rises 11% to 32%.

41% say, instead, that New Zealand retailers should become more competitive.

75% buy local, 55% overseas

The survey finds just 17.6% do not buy retail goods online. Of the 2,425,000 adults shopping online, 75.7% buy from New Zealand online retailers, 55.2% from overseas ones.

More than half have spent up to $500 each online in the past year. 21% have spent between $201 and $500 and a further 15% between $501 and $1000. Some 0.1%, equivalent to about 2,900 adults, have spent more than $10,000 in the past year.

From where do you buy retail goods online, if at all?

What would you say the total value of your purchases of retail goods online has been during the past year?

GST on overseas purchases

Respondents were told:

“People in New Zealand pay goods and services tax (GST) and duty on purchases from overseas. The Government does not currently collect GST on lower value goods for practical reasons and a 2011 review found it was not cost effective to collect GST and Customs duty (where applicable) if the amount totals less than $60, which is equivalent to the GST on $400 worth of purchases.

GST is not currently charged on imported digital products such as music and film downloaded from services including iTunes.

Retailers have argued that the ability to buy goods directly from overseas free of GST and duty puts overseas online retailers at an unfair advantage over New Zealand retailers.

The government has recently said that the continuing growth of online shopping was considerably affecting the Government's GST tax-take. The Prime Minister has been reported as saying that it was Inevitable that the cost of online shopping would go up as GST was charged to more goods and services. Officials have reportedly been asked to look at what other countries are doing to collect more GST.

New Zealand is also involved in efforts by the Organisation for Economic Co-operation and Development (OECD) to develop international rules.”

When asked what should happen with policy, 50.1% opted for the current one – with no extra taxes or duties.

Which of the following do you think should happen, if any? Please select all that apply

After hearing the argument that unequal tax treatment could close shops and cost jobs, 32.1% wanted equal tax treatment. However, 43.6% said New Zealand businesses should become more competitive.

If the current difference in tax and duty treatment of goods purchased online from overseas and goods purchased in New Zealand were to make New Zealand retailers uncompetitive, close shops or reduce jobs, what policy would you favour? Please select all that apply 

Showrooming:

And about 21% of adults are “showrooming”, going to a store to view or try items and then buying later online, up 6% in the past two years.

The numbers have changed since a Horizon survey in November 2012.

Back then 15% were showrooming and, after visiting a store, 5.6% of adults bought online from the same retailer in New Zealand, 5.9% bought online from a different retailer in New Zealand and 3.1% bought from a different retailer overseas.

That has changed.  Now, the largest number, 9.4%, are buying from the same retailer online. That’s an 84% increase.  Not only that, but a higher proportion of showroomers – 45% - are now buying online from the retailer they visited to view or try the goods.

6.8% now buy from a different retailer.  That’s a much smaller increase: 15%.  And as a proportion of showroomers, that’s reduced – from the largest group in 2012 at 40% to 32%

Finally 4.6% say they have bought from an overseas retailer.  That’s a 48% increase but as a proportion of showroomers, those buying from an overseas retailer after trying or viewing goods at a New Zealand retailer hasn’t changed since 2012.

In the past three months have you visited a store to view or try items, then later bought them on line?

For further information and in-depth reporting on this research please contact

Grant McInman, Manager, Horizon Research Limited

E-mail: gmcinman@horizonresearch.co.nz

Telephone: 021 076 2040

www.horizonpoll.co.nz