Shopping online: so much more than GST
If the controversy in Australia over GST on products bought from overseas websites signifies one thing, it is that e-commerce and online shopping has finally arrived.
New Zealand might not be an e-commerce trailblazer, with just 3 per cent of overall sales online, but the country is playing catch-up: nearly half of retailers are already selling online and a further 40 per cent are considering it this year.
Given this, retailers, consumers and government had better be prepared for the explosion to come!
It's not just a matter of GST on overseas sales, but tidying up the legislation department in general. At present, it looks a bit messy and potentially confusing.
Certainly, it does seem unfair that domestic retailers must charge tax on their goods and services, while overseas retailers are exempt.
It also seems unfair that domestic retailers have to keep up with different consumer protection laws, while overseas retailers are exempt.
In New Zealand, while consumer protection laws generally make no distinction between an item sold online or in a store, rules can carry over. For example, there are different regulations for buying at an auction or buying something for a fixed price.
This means for online that consumer rights differ if they click "buy now" as opposed to waiting for the auction price.
Of course, other countries have their own rules.
In Britain, for example, consumers have extra rights when buying online. They have a seven-day "cooling off" period, which allows them to return purchases as long as it remains saleable. But whether this applies to Kiwis and Australians buying from UK sites, I do not know.
Online sales seem to be bigger in the UK than in Australia. They're certainly much more popular than they are in New Zealand. Christmas Day saw one in 12 Brits shopping online!
Despite the online boom, even the UK retailers seem confused. Some only recently discovered they must refund postage costs for returned goods, not just the cost of the item.
It just goes to show that most countries could probably use a bit of certainty.
Currently, there is a Consumer Guarantees Amendment Bill working its way through the New Zealand Parliament, which might clarify the rules a little.
Yet, one country's approach won't solve the international mess. We talk about standards a lot in technology — things would be a lot easier if the rules for online were all the same in regards to consumer protection. Even if those rules are "buyer beware".
As for the duties and GST: it seems to me there's little point reducing the thresholds such that it costs as much to collect the money as would be received. New Zealand has been down this route already, which is why it recently abolished Gift Duty.