Value Added Tax >> Export
GST: Accounting for land and other high-value assets
Date Added: 2011-06-07New Zealand’s GST applies to the widest possible range of goods and services, with minimal exceptions. This reduces the extent to which GST alters consumption and production decisions in New Zealand, thereby creating economic efficiency and reducing compliance and administrative costs. Because GST is designed to tax consumption rather than production, one of the basic principles of the tax is that businesses should not be subject to GST when producing goods and services. This is achieved through the credit-invoice mechanism, which ensures that the economic incidence of the tax is removed on most business purchases. The mechanism also prevents the tax from “cascading” as goods and services are supplied between businesses that are registered for GST.