<P> The rate for GST effective since 1 October 2010 is 15% . This 15% tax is applied to the final price of the product or service being purchased and goods and services are advertised as GST inclusive . </P> <P> GST was introduced by the Fourth Labour Government of New Zealand on 1 October 1986 at a rate of 10% on most goods and services . It replaced existing sales taxes for some goods and services . GST was a part of the economic reforms initiated by Labour Finance Minister Roger Douglas dubbed Rogernomics . GST was introduced in conjunction with compensating changes to personal income tax rates . </P> <P> Since its introduction it has had two increases, on 1 July 1989 the rate increased to 12.5% and on 1 October 2010 it increased again to 15%, to pay for income tax cuts by the National Government . </P> <P> GST - registered organisations and individuals pay GST only on the difference between GST - liable sales and GST - liable supplies (i.e., they pay GST on the difference between what they sell and what they buy: income less expenditure). This is accomplished by reconciling GST received (through sales) and GST paid (through purchases) at regular periods (typically every two months, with some qualifying companies opting for one - month or six - month periods), then either paying the difference to the Inland Revenue (IRD) if the GST collected on sales is higher or receiving a refund from IRD if the GST paid on purchases is higher . </P>

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