Tax changes will hit big spenders

Press, 10 November 1983, Page 18

Tax changes will hit big spenders

PA Wellington Big-spending New Zealanders will pay higher duty and sales tax on goods bought overseas under new regulations says the Assistant Comptroller of Customs, Mr George Bathgate. The regulations, effective from November 14, allow $2OO worth of goods free from duty and sales tax instead of up to $5O for cameras and electronic goods and $5O for other dutiable goods. However, the Customs Department has abandoned its normal practice of discounting about 20 per cent from the overseas retail price of goods before taxes are calculated.

The effect would begin to show about the $BOO mark, Mr Bathgate said. Under the existing system duty and sales tax on an $BOO video-cassette recorder amounts to $620. Under the new regulations it will be $630. At the moment, that video-cassette recorder is subject to an immediate 20 per cent discount. The reduction is made at the department’s discretion, mainly to take account of the built-in domestic tax on the article in its country of origin.

After the 20 per cent discount is allowed, the video recorder is worth $640. Customs then deducts the $5O concession, bringing it to $590. Combined duty and sales tax on that is $620. From Monday $2OO of the value of that recorder will be free of taxes, but Customs will calculate duty and sales tax on a base figure of $6OO, not $590. That works out at $630.

“The high rollers, the passengers who spend a lot of money, are in fact disadvantaged,” Mr Bathgate said. The regulations offered big advantages to people spending just a few hundred dollars, he said. This week, someone bringing home $lOO worth of jewellery will pay $7.50 duty and sales tax. Next week they will pay nothing. A $2OO camera which this week attracts $99 duty will cost nothing, and a $5OO stereo, now $441, will cost $378 duty.

A $6OO television set, now $605, will cost $504, in duty. Television sets and fur clothes have been excluded from the duty-free concession. They are now included in the general $2OO concession.

Someone going to Australia can take one litre of duty-free liquor. Returning passengers, who could previously, bring in a large bottle of spirits and a bottle of wine, will be able to arrive with six bottles of wine.