The Government is releasing a discussion document tomorrow on applying GST to online purchases.

Currently people can import goods of up to 400 dollars from overseas and not pay GST, but it's a system domestic businesses have criticised as being unfair, and one that leaves them at a competitive disadvantage.

The Prime Minister already thinks people should have to pay GST on online overseas purchases, pointing out that there are 12 jurisdictions around the world that make people do this.  

"In principle if you buy, for instance, Sky TV, and pay for that in New Zealand you pay GST for the services you get.  Why shouldn't you pay if you take Netflicks from offshore, or something like that?," he questioned. 

Despite this, the Prime Minister said no decisions have been made by cabinet, adding there will be a discussion tomorrow when the documents are released.