With Australia moving to collect tax on low value goods beginning July 1 next year, Kiwi retailers are facing the likelihood of being hit both ways across the border on the sale of low value goods, according to Retail NZ.

The industry association said the release of draft Australian legislation that would require foreign companies to pay GST, provided reason for the New Zealand Government to act.

Starting in July next year, the law would require overseas suppliers to collect and remit GST on sales of low-value goods to Australian consumers.

“Australian retailers will continue to be able to sell low value goods to New Zealand customers, free of tax and duty, but Kiwi retailers selling their goods to Australian customers will now be required to pay Australian GST,” said Greg Harford, Retail NZ’s general manager for Public Affairs.

“While we endorse the idea of a level playing field for all retailers and accept the Australian Government’s move to charge GST, it’s just not right that our New Zealand Government is continuing to give a massive price advantage to Aussie and other retailers selling into New Zealand,” Harford said.

According to Harford, the New Zealand Government’s continued refusal to eliminate the low value goods loophole means that, in some cases, Kiwi retailers have to charge up to 25 per cent more in GST and duty.

“Our government is missing the opportunity to level the playing field for retailers and earn extra revenue from foreign multinationals selling low value goods to New Zealanders,” he said.

“Retail NZ is strongly advising the Government to act with urgency to follow the Australian lead to require foreign retailers to register for GST if they sell to New Zealanders,” Harford said. “Doing so would be a simple and straightforward solution that would allow goods to cross the border seamlessly, while still allowing our Government to collect the tax rightfully due.