Scott Alastair: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In CommitteeText is incorporated into the Bound VolumeScott Alastair: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In Committee[Sitting date: 12 April 2016. Volume:713;Page:10408. Text is incorporated into the Bound Volume.]ALASTAIR SCOTT (National—Wairarapa): This is a short call on Part 3 of this bill which refers to GST. GST is a very good way of collecting tax for the Government because it is broad-based there are no exemptions and it is a disincentive to consume. It taxes those who consume for goods and services so it encourages in other words people to save and invest which is of course why GST was increased from 12.5 percent to 15 percent at the time. Of course it enables the Government to reduce direct taxes which is essential if you want people to work harder earn more and become more productive.So I just wonder what might happen once we see the universal benefit that is proposed by the Opposition. I wonder where GST might go to if we all got paid $11000 on the day.I would like to come to the bill which talks about the goods and services tax relating to cross-border services and intangibles with the refinement in the Finance and Expenditure Committee to make it a little bit easier in regard to people who provide services on a collective basis. I am talking about insurance where you might have a group of people in a country or around the world supplying insurance to a base of people in New Zealand. Prior to the select committee process every one of those suppliers would have had to register for GST and collect and pay GST. It has been a positive improvement in the select committee where those offshore people can use an agent and be represented by one entity so enabling the tax to be collected by one agent and returned to the New Zealand Government. That is a very positive improvement.The other positive improvement through the select committee that I would like to mention is around the choice of zero rating for those offshore companies that are dealing with New Zealand companies that are GST-registered obviously in New Zealand. That offshore company can automatically say “We are to be zero rated and therefore there’s no need to collect any tax.” because there is no tax on a GST-registered business in New Zealand. We are aiming only to collect tax that would otherwise be paid by consumers. This is very much focused on the New Zealand consumer who purchases these intangible goods and services from offshore suppliers.The Opposition talked about some discussion around tangible goods. It is not true that tangible goods are exempt. There is GST taxed and collected at the border. I think the Opposition is referring to the threshold that applies to tangible goods so there is discussion. Of course if you had a zero threshold or a very low threshold that would be a loss-making venture for the Government because of the transaction costs that are involved in that work.Of course there is work to be done on the tangibles but that is not part of this bill. This bill focuses on the intangible services and that is only going to be growing as we purchase more and more Netflix online films and data. More and more data is going to be travelling this way and this is a very simple way of collecting what is quite rightly GST that is paid by the New Zealand consumer and is currently not being collected. As a result of this bill it will be collected. This is a positive approach to GST legislation. Thank you.