National is launching a campaign against Labour’s new $100 million App Tax, which will hit Kiwis’ back pockets hard in the middle of a cost of living crisis, Finance Spokesperson Nicola Willis says.

Labour’s Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) was reported back to the House yesterday from the Finance and Expenditure Committee. Independent experts say the App Tax could raise prices by $100m a year.

“After the Ute Tax, the KiwiSaver Tax, the Jobs Tax, and now the App Tax, it has become clear: if you use it, Labour will eventually try to tax it. They just can’t help themselves,” Ms Willis says.

“Labour has ignored the large number of submitters who opposed their plan to introduce a requirement for digital platforms like Uber and Airbnb to charge GST on services provided by individual sellers, like drivers and accommodation hosts, even if they fall under the usual $60,000 GST threshold.

“In its submission to the select committee, the Law Society warned it was concerned the proposals in the Bill represented ‘a significant deviation to the orthodox GST treatment of services supplied in New Zealand’.

“These services already follow the same rules for GST as everyone else. This is simply another tax grab from Labour to fuel their wasteful spending. When they run out of their own money, they come after yours.

“New Zealanders are battling the worst cost of living crisis in a generation. Instead of delivering an economic plan that would ease the pressure on Kiwis’ back pockets, their only solution is slap them with yet another tax.

“Inland Revenue advised the Government that this tax would be ‘passed on fully to consumers’ and that ‘[this] will increase the cost to consumers of purchases made through digital platforms by up to 15 per cent’.

“This means that someone that uses a ride sharing app twice a week could be paying hundreds of dollars extra a year.

“Airbnb have estimated that Labour’s new tax could have a half-billion dollar hit on the New Zealand economy. A $400 accommodation bill for a weekend away booked through a digital provider could be up to $60 more expensive.

“Rather than hitting multinationals as Labour claimed it would this tax will instead hit Kiwi app users and the Uber drivers, Bookabach providers and the like who use apps to connect with their customers.

“We will fight against this new tax every step of the way. National opposes the App Tax and if elected we will reverse it.”

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