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Re: [SLUG] NZ proposes GST on downloaded software.[ Here next ?]



On Thu, 28 Jun 2001, Jobst Schmalenbach wrote:

> On Thu, Jun 28, 2001 at 04:02:03PM +0930, Richard Sharpe (sharpe@nospam.ns.aus.com) wrote:
> > Jobst Schmalenbach wrote:
> > 
> > > On Thu, Jun 28, 2001 at 12:53:38AM +1000, Adam F. Bogacki (afb3@nospam.primus.com.au) wrote:
> > > 
> > >>  The NZ government Government is proposing to charge GST on software
> > >> downloaded over the internet, possibly threatening the open-source model of
> > >> software distribution.
> > > 
> > > 
> > > This is actually in FAVOUR of linux. 
> > > If companies have to pay more for software (add 10% to the purchase) they'll
> > > start thinking and move to a more viable option(s).
> > > 
> > > ....... and $0 + 10%gst = $0
> > 
> > Ummm, I don't think you understand how GST works. At least here in Oz, 
> > companies get to deduct the GST they have paid from the GST remittance 
> > they make to the government.
> 
> I dont, thats why I have accountants! But I actually asked two of them
> what happens when I buy software from USA (now and future, if we need to pay 10%).
> 
> Software (currently) is not taxed if you **download** it. If it gets
> via customs, add 10%. In the future (if this law will get through) downloads
> will be taxed with 10%, too! (BTW governments would be silly not to take
> this revenue, thinking that MOST of software will be via internet anyway!!)
> 
> And yes you get *SOME* of it back. You will not get all of it back or
> there wouldnt be any point of the 10% GST anyway, wouldnt it????

No you get all of it back, the GST is a *consumer* tax. Anything you buy
for business will eventually be passed on to your customers (assuming you 
want to operate at a profit), if the government charges tax at both points
it is double dipping. (Incidently Hanson proposed a tax that did operate
like this although the rate was only 2% not 10%).

Anyway by now we are hopelessly off topic and it doesn't really matter
since even if you aren't paying gst on the software you are still paying
for the software anyway.

Benno

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