10-06-2025, 12:53 PM
Removing GST likely wouldn't have much of an affect on prices, or, at the very least, wouldn't have the 13% reduction you hoped for. A big factor in price-setting is "how much people are willing to pay" which isn't affected by GST. As such, if GST was removed, retailers could continue to charge the same amount. This could be prohibited by law, in which case prices would all immediately reduce by 13%, however there would be no way to prevent a fairly steady increase over subsequent months until prices returned to their pre-GST removal levels.
And, a great argument for GST: it taxes tourists. Supposedly in the year to March 2024, tourists in NZ paid $1.7B in GST which equates to roughly $333 per tourist. If we scrapped GST in favour of a tourist tax, I think adding $333/person to NZ's entry fee would actually start to turn people away, whereas they probably don't even think about the GST they pay.
And, a great argument for GST: it taxes tourists. Supposedly in the year to March 2024, tourists in NZ paid $1.7B in GST which equates to roughly $333 per tourist. If we scrapped GST in favour of a tourist tax, I think adding $333/person to NZ's entry fee would actually start to turn people away, whereas they probably don't even think about the GST they pay.