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$4.2 billion in sales, subject to 15% GST, suggests $630 million in tax revenue to the NZ government. Not a bad tax take from an operation that runs out of anot
by al452 10y ago
$4.2 billion in sales, subject to 15% GST, suggests $630 million in tax revenue to the NZ government. Not a bad tax take from an operation that runs out of another country.
- drpgq 10y agoIn the US, I suppose a state without a sales tax like New Hampshire also effectively loses out on tax revenue to Apple.
- mustntmumble 10y agoApple doesn't pay the GST on the sales, that is paid for by the consumers. (Yes I know that is a gross simplification but that is the general idea of GST - it is a consumption tax).
- omarforgotpwd 10y agoWhether the consumer pays the tax on top of the retail price, or the producer raises their prices and pays the tax out of their end, it is all the same.
- throwaway2048 10y agotaxes companies pay come out of profits, they may choose to raise prices to increase profits, or due to competition etc, they may not. Its a vast oversimplification to say that all corporate taxes are just paid by the customers anyways.
- omarforgotpwd 10y agoI agree that it is an oversimplification to say the effects are exactly the same, but my point was just that the price will go up and the consumer will pay more regardless of where the tax is levied.
- throwaway2048 10y agoconsider that if they could have charged that much to begin with, they would have.
- deleted 10y ago[deleted]
- valuearb 10y agoIt's an oversimplification but mostly accurate. A 15% GST affects you and your competitors and competitive products identically, so they all raise prices to compensate so consumers pay it. Income taxes are a little different, one business may be more profitable than a competitor, and they may have different profit margin requirements to justify building/selling their products, so the adjustments are going to be different per company. But essentially prices are adjusted fir tax levels within what demand allows. Imagine income tax is increased from 0% to 50%, any business that was already making marginal profits needs to increase prices or go out of business. Assume Dell makes 4% profit margins on pcs, and Apple 20%, Dell can increase prices 2% to retain its after tax profit levels, Apple needs to increase prices 10%, but may not be able to given its competitor Dell did not.
- lostlogin 10y agoOne part that is different and really irritates me - some places allow products to be advertised at a price excluding taxes. Include the tax in the price always, no other value is relevant to me.
- jumpCastle 10y agoI read people claim that they like it since it reminds them that they pay for the government's operations.
- thaumasiotes 10y ago...so if the GST were zero, Apple's revenue from New Zealand wouldn't be any different?
- deleted 10y ago[deleted]
- sitharus 10y agoCorrect. Most financial reporting doesn't count GST collected as revenue. There are circumstances where this isn't true but generally it's booked as a liability.
- thaumasiotes 10y ago> Correct. Most financial reporting doesn't count GST collected as revenue. You seem to be assuming that, if GST was zero instead of 15%, the prices consumers paid for Apple products would be 13% lower than they are now, and that despite these lower prices no additional purchases would occur. Why?
- sitharus 10y agoBecause that's not how I understood your question. I interpreted it as asking if GST is included as part of revenue then expensed. This is not the case as GST is a tax collected on behalf of the government so it is always regarded as a liability. As to what you intended, perhaps. Perhaps not. I'm not an expert in sales of Apple products, you'd need market research to see if a 13% discount would result in an appreciable amount of sales.
- skdotdan 10y agoOne thing is who legally pays the tax, and another thing is who effectively pays it. It depends on the elasticity of both the demand and supply.