Thursday, May 3, 2018

Unity Books gets its wish on sales tax but will it make any difference?

You might think that a bookshop is a strange place for a government minister to announce a tax increase, but that's what happened on Tuesday and the bookshop concerned is pleased:

"The Government is to close a loophole that gives offshore companies an advantage by not requiring them to collect GST on all goods sold to local consumers. “Domestic businesses have long called for greater fairness in the treatment of low-value goods from offshore retailers,” says Revenue and Small Business Minister Stuart Nash, who announced the new initiative at a news conference at Unity Books in Wellington this morning. “Foreign companies are not required to collect GST on goods under $400. We are now calling for feedback on a system to register these suppliers for GST.”
Unity is effectively the only significant independent bookshop left in Wellington, but despite the demise of Capital Books in Featherston Street in 2014 which focused on technical and transport books, it has made no attempt to cater for those customers left in the cold and still rigidly adheres to its literary, social studies and arty fare.

For the book lover, however, a more severe blow was the demise of Dymocks at the south end of Lambton Quay in 2009.

Unity clearly sees UK/US-based web retailers such as Book Depository and Amazon as threats.  But... it's a shop that won't stock most NZ published titles, let alone anything like a minuscule percentage of what these overseas online retailers have.

Price is unlikely to be a major factor in why book readers use the web retailers -- range and convenience are.  If Unity can't/won't stock what people can find online, then it will make no difference.

Does Unity want to be associated with a tax increase?  There will be a consumer backlash to that.

Why didn't Unity take the other direction: argue instead for books to be exempt from VAT/GST as is the case in  the UK and Ireland?  Or at the least, that the rate of tax on books be a concessional one which all the other EU countries except Denmark have?

The availability of our books on Amazon (its US site) is important for us, and it is for other publishers.

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