Y’know, it’s not something I or possibly any other Kiwi consumer gives a second thought to.
It’s been 15 years since GST was introduced in NZ, and there was some kerfuffle over the amount, initially 10% later bumped up to 12.5%. The Opposition jumped up and down about it, but then that’s what Oppositions are supposed to do - it’s their raison d’etre.
In NZ GST is simply a 12.5% charge applied to most goods and services. Such taxable activities are defined in the GST Act 1985 as:
(a) Any activity which is carried on continuously or regularly by any person, whether or not for a pecuniary profit, and involves or is intended to involve, in whole or in part, the supply of goods and services to any other person for a consideration; and includes any such activity carried on in the form of a business, trade, manufacture, profession, vocation, association, or club:
(b) [Without limiting the generality of paragraph (a) of this subsection,] the activities of any public authority or any local authority.
Exemptions include:
- Financial Services
- Donations of G or S by any non-profit body
- Any accommodation in any dwelling by way of hire, or in the case of leasehold land, if the land is used for principal accommodation.
- Fine metals for investment
- Exports, services supplied outside NZ or international travel and freighting.
Financial services and fine metals are classified Zero-Rated or Zero %.
The supplier must be GST-registered if their turnover exceeds NZ$30,000 (in Oz the threshold is Aus$50,0000 or $100,000 for Non-Profits Orgs), or if less then $30,000, can choose to be registered.
GST-registered businesses charge GST on their sales and income, and claim back the GST on their purchases and expenses (called input tax credit in Oz). They pay the difference to Inland Revenue.
It’s not beyond the abilities of any half-decent accountant. My father, who’s not an accountant, was taught how to do it in a couple of weeks.
I believe Australia’s problems are largely due to what it considers GST-free (which is a much greater list than the one I’ve supplied for NZ), and the rather vague and frequent use of the word ‘most’ (or ‘some’) in front of those exemptions.
Most foods?
Most health services?
Most educational supplies?
Most child services?
I admit I got more confused reading your government’s “Guide to GST” than reading the legal pedantry of my own government’s GST Act!