15% GST

[Ixion]

Generally a business should be selling more than they buy, so should be collecting more GST than they pay, so only need to pay the surplus to the Government.

Yes, but they've often got to pay the GST on purchases to the government, before they have sold the goods and collect the input GST (more applicable to capital goods, not a corner shop). So they have to fund the GST content in between. Funding 12.5% is easier than funding 15%.

[Mully]

Generally a business should be selling more than they buy, so should be collecting more GST than they pay, so only need to pay the surplus to the Government.

True - but it's a cashflow issue if they're importing (unless they have a NZ Customs' 20th of following account, they have to pay GST on importation). Particularly with high-value stuff.

EDIT: Damn you Ixion with your fast typing.

TBH the govt should lead by example, how bout trimming thier massive wages down a bit, say to 80k a year, If you cant live on that then get fucked, hell if a party wanted to buy my vote that policy would probably do it!

I've thought for a while that all politicians should be paid the "average" wage (assesed annually) - betchya that would get the economy moving and the average wage increased quick-smart.

[p.dath]

I've thought for a while that all politicians should be paid the "average" wage (assesed annually) - betchya that would get the economy moving and the average wage increased quick-smart.

Betcha that would mean lots of talented people with experience wouldn't put their hand up to work in Government. Better to take an easier higher paid job in the private sector.

I would not want the job of being a politician. No matter what you do someone is going to be pouring scorn on you. The media always want to hang you out to dry. And there is always someone wanting your job.
What a shit package.

[Mully]

Betcha that would mean lots of talented people with experience wouldn't put their hand up to work in Government. Better to take an easier higher paid job in the private sector.

I would not want the job of being a politician. No matter what you do someone is going to be pouring scorn on you. The media always want to hang you out to dry. And there is always someone wanting your job.
What a shit package.

Yeah, that's true.

I've always thought I'd prefer the job of an MP (preferably list) rather than a Minister. Rather be an unknown MP than an attention seeking minister.

[The Stranger:Me]

I've owned all three, but at the moment I'm sitting out of the share market and the rental market.

You are correct. I was wrong. Only trading is a taxable activity, and if you sit on something for 10 years you would be regarded as an investor.

Surprising how quickly you forget then isn't it? Very surprising i would have thought given your profession.


As demand increases and supply remains static prices will naturaly rise. As prices rise, supply will increase until equilibrium is reached again. We have an under utilised building sector, so adding supply would be particularly easy at the moment if the demand existed ...

Why will demand increase. Unless you anticipate population increases for some reason at the same time perhaps. I'm simply talking about return on investment. Landlords will seek to recover the "loss" from tenants.

I agree about the ease of borrowing. However the "rules" for rental property borrowing have somewhat changed in the current climate. I think less people will be getting 100% equity loans approved at the moment for residential property. Of course, if you have other equity to offer as security you can still achieve 100% finance on the equity in a single property.

Hence my reference to mum and pop, who frequently have at least some equity in their own home.



I read a book late last year where Brad Sugars talks about one of his most profitable activities - where he buys businesses for nothing down, and takes over the debt (such as the remainder of a lease for a shop). He targets business owners who have had enough of the stress and just want to quit. Then he fixes up the business and sells it 3 to 12 months later.

So what? There is money to be made in any industry, if you have the right stuff etc for that industry. I guess the fact that many don't is a good reason why more don't do this, however I fail to see what good will come of pushing people into an area where they lack expertise, confidence or experience. Business failures are frequent enough already thanks.
America comes out with some pretty cool innovation. There are those with so much money they are prepared to take a punt on a project, stump up a few mil on a wing and a prayer (amazon.com anyone?) Many of these projects fail, a few succeed. Hence we see a lot of progress come out of America. We can't replace these people with mum and pop, they are ill equipped to handle it.


I agree that a lot of what NZ has felt is due to foreign entities. I disagree that our residential property market has softened the blow. A strong export lead recovery which is created by businesses would have put NZ in a far better position.

A strong export led recovery requires markets to sell into. Hello, the markets dried up, there is a global recession you realise.

Ouch. Always with the personal attacks.

FFS harden up - and think before you post. Even your replies are other peoples thoughts regurgitated, come on man, give me an original thought.

Are you taking RRRS in March? I would very much like to meet you in person.

At this point I shall attend RRRS in March. I'm sure we'll meet. Given the circumstances I will of course be on my best behaviour as my role changes somewhat as I will be working for you.
That said, silly comments etc will still be met with some disdain.

[p.dath]

At this point I shall attend RRRS in March. I'm sure we'll meet. Given the circumstances I will of course be on my best behaviour as my role changes somewhat as I will be working for you.
That said, silly comments etc will still be met with some disdain.

I shall be carefull to listen.

[The Stranger:Me]

the first bit was kinda tongue in cheek.

I thought you could claim GST back? Put that in with the knowledge that there are likely to be personal tax cuts also. People will go out and spend it. Call them what you like... but if there's extra cash in the pockets of some people, they will go and buy things. Goods prices are over-inflated anyway people will pay the same price, but they'll be shifting more units. I'm just saying it's a possibility. whether i believe it or not is neither hear nor there. I'm just guessing because i don't know. But if i was in business, i'd be rubbing my hands around about now in anticipation... national, you have my vote. Economy stimulated blah blah blah...

Generally a business should be selling more than they buy, so should be collecting more GST than they pay, so only need to pay the surplus to the Government.

Ok, to keep it simple, regardless of claiming back some and paying some, you only pay the GST on the portion of value you add or the margin you add. You DON"T make anything on the GST. Nada, nothing.
Do you really think that the IRD is in the business of giving money away? Take you meds!

Re the cash flow issue. yes it can be somewhat positive, however for the most part you can forget it. No business is being paid by the IRD to collect tax for them. It takes time and money and there are compliance costs.

Now sure, there are exceptions to all of this, there is to any bloody thing, but by and large that's the way it works!

[Winston001]

NZ has got a fairly large disparity between rich and poor.



If anything the government should be aiming at least not to widen this gap. Putting some taxes into place to reduce property speculation would be a good start...

Who are these rich people that are often referred to? I don't know them. Certainly I know people who have assets but not much cash or income. I know people with good incomes but don't think of them as rich.

3% of New Zealanders earn over $100,000. This 3% pays 27% of the total tax take. That fact alone makes it very difficult to say the "rich" aren't contributing to our society in a major way.

Check this out http://www.treasury.govt.nz/budget/2...xpayers/01.htm

As for property speculation, it leaves me cold too. However the Australians have Capital Gains Tax, Land Tax, and high Stamp Duty. In spite of all of those barriers the Aussie property market continues to leap ahead. Property speculation isn't halted.

[Virago]

The misconceptions around GST astound me.

Businesses do not benefit from (or suffer loss from) GST. Businesses are just unpaid tax collectors. They collect the GST charged on their sales, and pass it on to the government.

Sure, businesses claim back the GST on their material costs (i.e. costs that have a GST cost content). Without that, the GST would compound on each transaction, becoming GST on GST on GST ad nauseum.

Take a very simple case:
Someone makes an article and sells it to a wholesaler for $100 plus GST ($112.50). Assuming they have no GST costs to claim back, the manufacturer pays the $12.50 of GST to IRD.

The wholesaler sells the item to a retailer for $150 plus GST ($168.75). Wholesaler owes the $18.75 GST to the government, but can claim back the $12.50 GST already paid, so pays the balance of $6.25 GST to IRD.

The retailer sells the item to Joe Public for $200 plus GST ($225.00). Retailer owes the $25.00 GST to the government, but can claim back the $18.75 GST already paid, so pays the balance of $6.25 GST to IRD.

At the end of the chain, Joe Public has paid $25.00 of GST on his purchase. That $25.00 was paid by the manufacture ($12.50), wholesaler ($6.25), and retailer ($6.25) - total of $25.00.

The IRD have their $25.00. The businesses have gained (and lost) nothing - aside from the cost of processing the bloody GST returns...

[The Stranger:Me]

The misconceptions around GST astound me.

Really?
How long have you been on KB noob?

[p.dath]

FFS harden up - and think before you post. Even your replies are other peoples thoughts regurgitated, come on man, give me an original thought.

Its funny how the thoughts of many with the same beliefs sound the same. Sometimes they even form the largest minority, and then we call it Government.

[The Stranger:Me]

Its funny how the thoughts of many with the same beliefs sound the same. Sometimes they even form the largest minority, and then we call it Government.

Took you a while. I'll give you 7/10 for originality and 3/10 for content. Still it's a start.
So how did feel? Empowering?

[mashman]

Ok, to keep it simple, regardless of claiming back some and paying some, you only pay the GST on the portion of value you add or the margin you add. You DON"T make anything on the GST. Nada, nothing.
Do you really think that the IRD is in the business of giving money away? Take you meds!

So you don't take the total GST of sales/services and remove total GST purchases/costs and the resultant GST is paid/refunded by the government? Same asVirago's example... Sorry, only been here 3 years and haven't read everything yet! happy to be educated if i'm missing something. I was saying, however, with the currently inflated prices, businesses could take the 2.5% hit without sending it to the end user. and people getting an income tax cut will go out and spend it.

[p.dath]

So you don't take the total GST of sales/services and remove total GST purchases/costs and the resultant GST is paid/refunded by the government?

This is effectively what he said. The difference is effectively the margin or mark up.

I was saying, however, with the currently inflated prices, businesses could take the 2.5% hit without sending it to the end user. and people getting an income tax cut will go out and spend it.

I can really see business's wanting to take a reduction in income following a recession. How about they just lay people off until they recover the loss? I'm being sarcastic.

The GST is a Government tax, not an expense imposed by the business. Businesses will be charging customers at the rate prescribed by the Government.

[The Stranger:Me]

So you don't take the total GST of sales/services and remove total GST purchases/costs and the resultant GST is paid/refunded by the government? Same asVirago's example... Sorry, only been here 3 years and haven't read everything yet! happy to be educated if i'm missing something. I was saying, however, with the currently inflated prices, businesses could take the 2.5% hit without sending it to the end user. and people getting an income tax cut will go out and spend it.

Look, I know everyone accuses me of getting personal.
Hey, sure, I like to add that personal touch to the services I provide.
But I got to ask, why the fuck do you comment authoritatively on shit you know fuck all about? You have been in the country for 3 years, ok, you can't be expected to know everything about how everything works over here can you. So by all means ask.
But for fuck sake, don't go saying shit as if you know what the fuck you are talking about when clearly you don't.

Now to be sure, I can dig the post I quoted is you is seeking clarification, and our esteemed colleague p.dath has clarified. But I am referring to your earlier posts.

Ok, scratch that, no need to reply. I just noticed your user title and note that you are a self confessed idiot. That pretty much explains it.