GST will apply to books—Minister

Press, 16 August 1985, Page 5

GST will apply to books —Minister

By OLIVER RIDDELL in Wellington The Government has not reconsidered its plans to apply the proposed goods and services tax to books. The Book Council has

campaigned to have books exempt, and the Minister of Finance, Mr Douglas, said he had had correspondence from it.

In its letter, the council had said: “... New Zealand claims to have the highest consumption of books in the English-speaking world. If it applies GST to books it will be one of the few — along

with South Africa — that taxes them.”

Mr Douglas said countries that taxed books included Austria, Belgium, Denmark, West Germany, Italy, Luxemburg and Sweden. Britain and Ireland were the only E.E.C. countries where books were zero-rated.

Among the states of the United States with retail sales taxes, only Illinois had a general exemption for books, and that had been before 1961. In fact, among countries with which New Zealand liked to compare itself, it was more common for books to be taxed than not.

In the context of a general shift in the emphasis of tax collection from direct to indirect tax, there were no good grounds for making exceptions for any kinds of goods, Mr Douglas said.

Concessions for books would greatly complicate the collection of tax by businesses and would not guarantee low-priced books, as booksellers would price to what the market would bear and so capture the benefit of tax concessions in higher profits.

GST would do no more than subject publishers and booksellers to the same commercial regime faced by all other businesses, he said.