4 Aug 2015

Technology could boost online GST take

4:37 pm on 4 August 2015

Technology could help the Government's plans to collect tax on online purchases, a GST specialist says.

GST invoice

Photo: 123RF

Prime Minister John Key has indicated the threshold for paying GST could be cut to $20, or even zero, for internet services such as Netflix.

At present, most goods bought online from overseas costing less than $400 are GST-free.

Revenue Minister Todd McClay has confirmed he will take a paper to Cabinet this month on reducing that threshold.

Eugen Trombitas, a PriceWaterhouse Coopers partner and GST specialist, said one solution was to have the foreign seller registered so they comply with domestic tax laws.

"You could look at Customs collecting a little bit more, and there's some efficiency gains through technology.

"At the moment there's a lot of manual processing through the post office, and that can be slow, but technological advances could work in our favour."

Other ideas include having the foreign seller registered so they comply with domestic tax laws, and buyers paying GST in advance through online accounts, he said.

Mr Key said government officials were already working closely with their Australian counterparts on the matter.

"We are confident that we're marching towards a potentially successful outcome from the Government's point of view, where GST can be applied fairly and evenly whether you buy a purchase online or directly in a store, but we're sort of some way away from that."