'Netflix' tax pushes Spotify price up

Music streaming service Spotify has increased its prices by $2 a month due to a New Zealand government tax introduced last year. Photo / 123RF

Music streaming service Spotify has increased its prices by $2 a month due to a New Zealand tax introduced last year.

Spotify said in a statement that the price for new "premium" subscribers would increase from $12.99 a month to $14.99 from February 1.

Existing subscribers will continue to pay $12.99 a month until February 28.

The so-called "Netflix tax" came into effect in November, following which its name-sake also raised its prices.

Netflix, an online movie streaming service, lifted its prices from $12.99 a month to $14.99.

Physical goods bought online have long incurred a GST charge if they meet the value threshold, but the new tax affects things like streaming services, e-books, music and video downloads.

Under previous law, the government was missing out on $180 million a year by not collecting GST on online purchases, including $40 million from spending on Spotify, iTunes, Netflix and other online services.