Labour's Finance Minister Grant Robertson has backpedalled on Revenue Minister Stuart Nash's promise to start requiring overseas retailers to collect GST on goods bought by New Zealanders, saying the government was still looking at the issue.
This morning on Newstalk ZB, Nash said the Government would "absolutely" extend the law to cover all goods as well as services purchased from overseas.
At the moment, no GST has to be paid on goods worth less than $400.
Nash said leaving out low-value goods gave an unfair advantage to overseas sellers over New Zealand sellers.
"It gives a 15 per cent competitive advantage to [retailers] overseas. While our retailers had to deal with GST, overseas people didn't. It's the right thing to do."
However, Robertson later said the Government was only looking at the issue and no decisions had been made.
"I think what the Minister of Revenue was saying was that there's still quite a lot of work to do on it. This is clearly an area where there is an element of unfairness in our tax system and we want to investigate that."
Asked if Nash had jumped the gun, Robertson said it was Labour policy and Nash was "ambitious" for the tax system. However, Labour was still working out how to implement such a move.
"This is a case of a minister who is ambitious to make sure our tax system is fair and to make sure our small businesses get a fair go. I'm sure he'll continue to be a strong advocate for that."
Nash declined to do further interviews on the matter.
National's revenue spokeswoman Judith Collins said Nash was "enthusiastic" but did not seem to be across the details of such a proposal.
"Enthusiasm is an excellent thing in a puppy, but probably a minister needs to be a little less."
She said National had done some work on the issue when it was in Government and it was more complicated than Nash seemed to think.
"One of the issues we had was that if you are going to put on GST for low-value good which we were committed to doing, then you also needed to remove the tariffs still remaining on those low value goods, otherwise consumers would be paying more than they should be."
She said Customs paid for its administration and inspection costs out of the money it collected in tariffs, so that had to be dealt with as well.
Retail NZ had welcomed Nash's initial statement and urged Nash to align it with Australia's move to do the same from 1 July 2018.
Spokesman Greg Harford said local retailers had long been at a disadvantage to overseas sellers.
"This is the first time that a Revenue Minister has committed to fixing this issue, and we want to congratulate Mr Nash on his leadership.
The issue is becoming more pressing as online shopping grows in popularity, and as Amazon is about to move into Australia. It's just not right that Kiwi businesses that employ New Zealanders and keep our communities vibrant are taxed, while massive foreign corporations don't pay their share of tax for doing business here."
The so-called Netflix tax kicked in last October, requiring sellers such as Apple to charge GST on online purchases from New Zealand.
It came after a review in 2015 found the Government was missing out on about $180 million a year by not collecting GST on online purchases, including $40m from shopping on iTunes, Netflix, Spotify and other online services.
It follows moves by Australia to require New Zealand companies such as TradeMe to collect Australian GST on purchases sent to Australian consumers.
Currently no GST has to be paid on imported physical goods worth less than A$1000 ($1109).
Under the change, New Zealand retailers, suppliers or manufacturers who sell a total of more than A$75,000 worth of goods directly to Australian consumers will have to charge Australian GST (10 per cent) on those purchases, including those under A$1000.