Happy BIRTHdaaaay GSTee-eeeeeeeee

30 years!

…we celebrate 30 years of having a GST system that is world leading and simple to apply, says Revenue Minister Michael Woodhouse

?For 30 years now, the basic concepts of GST have remained unchanged since its introduction, and have rightly seen New Zealand?s GST system held up around the world as a model for other nations,? Mr Woodhouse says.

?When our goods and services tax was introduced, it was marked by three revolutionary concepts:

  • it was levied at a single rate
  • it has very few exemptions, making it a broad based tax, and
  • it was subject to extensive public consultation.

?A broad-based, low rate approach helps ensure that our GST is fair and generally free of the sorts of complexities seen in other such taxes around the world. This has made it easy to comply with and the revenue raised meant that income tax could be lowered.?

On its 30th birthday, our GST will now also cover online purchases of cross border services.

?From tomorrow, GST will apply to cross border services ? including e-books, music, videos and software purchased from overseas websites.

?It?s pleasing to see that on the day this change comes into effect, Inland Revenue have already received at least 75 GST on remote services registrants.

?This is the latest evolution of our broad-based tax and is an example of the government working with the private sector to produce sound tax policy which is fair for all.?

As value added taxes go, it is very pure. ?Every time those idiots on the left want exemptions for “basics” or other issues, they risk introducing real loopholes (not an HDPA one).

There is probably room for the tax system to be redesigned so that all our taxes, including income tax, match the 15% GST rate. ?But I’m not sure National will have the gonads to introduce it.