Tabuteau Fletcher: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In CommitteeText is incorporated into the Bound VolumeTabuteau Fletcher: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In Committee[Sitting date: 12 April 2016. Volume:713;Page:10407. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): It is a pleasure to rise actually in support of this part of the Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill. As I have said before there are good parts to this bill and this is one of them. Part 3 “Amendments to Goods and Services Tax Act 1985”—we absolutely support its intent but as noted by several speakers on this side of the Chamber it does not go far enough.Why do we say that? New Zealand First and I acknowledge that peers all across the Committee will have been consulting with businesses. We know that businesses have been waitingfor a long time—probably 9 years to be fair—for this Government to actually act to level the playing field to ensure that small to medium sized enterprises in New Zealand in particular are able to compete with big business from overseas. That is essentially the summation of the competition game we are talking about here. We are talking about small to medium sized enterprises that are suffering based on the fact that they must comply with their GST obligations whilst those predominantly large overseas international corporates sell their goods into New Zealand and for the last 9 years—as a random selection of time—those corporates have not been required to pay their GST obligations.The submissions to the Finance and Expenditure Committee were very clear and consistent. Each and every submitter who spoke on this part of the legislation said that “It was past the time to do something. We are grateful for what you have started to do for small to medium sized businesses in New Zealand.”So New Zealand First could not agree more with what I would class as kind of like the first step in part of a solution because as has been noted before—and I cannot say it emphatically enough—this is not the whole solution.It does not go far enough andthe arguments as to why we should not implement GST on all goods and services from merchandise traders and tangible goods as well as these intangible or—what is it called—“cross-border ‘remote services’ provided to New Zealand-resident consumers.” are half-hearted.A classic example is when I go and download a CD from some online music store. [Interruption] Download an album—thank you everyone. There we go. This is remote services—Kris Faafoi: I thought you were old school.FLETCHER TABUTEAU: —I am old school—to New Zealand residents and we are obliged to pay the GST. But if you buy the CD and get it mailed to you for some reason you are not obliged to pay the GST on it. It is nonsensical. It makes no sense and so—David Bennett: Get a gold card and you won’t have to pay anything.FLETCHER TABUTEAU: Good idea—get a SuperGold card and you might get a discount on it. Thank you Mr Bennett. We need to apply GST to all goods and/or services—intangible or tangible merchandise—that come into the country.The Government for some reason has put up an argument around insufficient funding for the Customs Service or it not being geared up adequately to address the issue but we were told by Retail New Zealand for example—it was only one group that put the numbers in front of us—that the top 20 online providers in terms of online stalls around the world offshore international corporates account for 86 percent of New Zealand activity in terms of purchasing online. What we were further told is that those companies are required to comply with GST or VAT obligations in many diverse parts of the world so they have point-of-sale software systems geared up ready to go to implement GST on intangible and tangible goods. They literally have to click a button and that practice of applying GST to the sale of goods to be shipped to New Zealand is enacted. At the point of purchase a New Zealander will pay the GST component. The offshore entity will account for that in its accounts and make its GST obligations paid because all of them as all in the room will know are above that $60000 threshold. So companies are there they are ready to do it and the arguments against it are not sound.