Amazon is one of many international retailers that has changed the way it does business online in New Zealand, following the implementation of the country’s new GST rule on December 1.
The e-commerce giant has stopped all shipments from its international stores to New Zealand, though customers can still purchase from Amazon’s US store, where the majority of Kiwis currently shop, according to an Amazon spokesperson.
The online marketplace said in a statement it is still completing the technical work required on its international sites “to ensure compliance with the legislation”.
Starting December 1, international retailers selling products in New Zealand that cost less than $1000 are now required to collect and pay GST.
This rule, which was announced in June, is intended to level the playing field for domestic retailers, which have long been required to collect GST.
Revenue Minister Stuart Nash said closing the tax loophole is expected to bring in roughly $130 million in revenue each year by 2022.
However, some worry the law will disadvantage consumers, since international businesses may be discouraged from investing the time and energy required to become compliant.
“In the long run we risk not just seeing established sellers shut up shop, but potential new ones will decide it’s just not worth the cost or bother to extend sales to Kiwis,” said Louis Houlbrooke, spokesman for the New Zealand Taxpayers’ Union, a pressure group that called on the government to delay the tax just before it went into effect.
Houlbrooke said consumers would be denied choice and competition, and that’s on top of the direct cost of the tax itself.
“In the case of Amazon, we see that it’s not just the direct cost, but the complexity that is making it difficult to sell to New Zealand shoppers,” he said.
“The timing of the tax’s introduction, just as shoppers are beginning their Christmas shopping, is grinchy,” he added.
Amazon said, however, it is pleased to be making the significant technical investment to ensure customers in New Zealand will continue to be able to shop from their wide selection of products.