Amazon tax: What it means

Revenue and Small Business Minister Stuart Nash at Unity Bookshop in Wellington. Photo / Supplied

The proposed Amazon tax that will see the Government collect GST for low-value online items will not make a huge difference in the way Kiwis buy goods, Consumer New Zealand chief executive Sue Chetwin says.

She said people were shopping online for quality and choice, not just price.

Although it would not be a windfall for New Zealand retailers, if a customer was making a decision based just on price they would probably go for the local option.

"If the price is similar people will probably buy it here as they can touch and see and get it quickly. It does level the playing field as it does put up the price for less expensive items. For local retailers it is good."

However, people would continue to shop online for goods they could not get locally despite the increased price with the Amazon tax, she said.

Small Business Minister Stuart Nash and Customs Minister Meka Whaitiri yesterday confirmed that overseas websites selling low-value goods to Kiwis would have to collect GST from 2019.

The ministers announced details of the new measures at Unity Books in Wellington, run by veteran bookseller Tilly Lloyd, who called it "brilliant news".

Before speaking at the event, Nash bought a thick book of Rolling Stone magazine covers. It cost him $60, including GST. Lloyd said the US price — US$40, or about $57 — showed it was often better to buy local anyway.

Buy NZ Made Campaign acting executive director Anna Heyward said the plan would level the playing field for New Zealanders making and selling products here.

Wellington man Lee Slater, who regularly buys from overseas retailers including Amazon, said if the price difference was marginal, he chose a New Zealand retailer.

But when he bought gifts for family living overseas or 20 music CDs at a time, the price difference was so large that he bought from overseas online retailers.

"If I purchased all of my foreign CDs from [local music stores] it would be twice as much, possibly even more."

However, Slater supported the announcement.

"It's going to hit me more in the pocket, but I think it's fair."

Real Groovy record store owner Chris Hart, welcomed the news.

"Obviously, we're at a disadvantage against the other online retailers. It's great we'll be on the same platform as them."

Hart, who opened the store 37 years ago, said it would be difficult to measure any immediate benefit but he was optimistic.

"Overall, I'm pretty sure it's going to have an effect."

Booksellers NZ chief executive Lincoln Gould said the move was not a silver bullet for retailers, "but it does take away that 15 per cent impost from bookshops and other small retailers before they even open their doors".

Booksellers offered Kiwis something that the likes of Amazon could not, he said.

"It's the community hub that bookshops provide in local areas which the internet can't really compete with."