GST on imports would be Christmas present for retailers

Wednesday, 11 December 2013  Features

"The government may cost consumers an extra 10% for their Christmas presents next year if they shop for them on the net overseas - but the overall benefit to Australian brick and mortar retailers is questionable," said Dale Boccabella​, an Associate Professor of Taxation Law​ at the Australian School of Business.

Retailers are once again urging the government to lower the $1,000 threshold upon which GST can be charged to goods bought online from offshore retailers. However in this latest push, the State Governments are also getting behind the brick and mortar retailers in pushing for a lowering of the threshold.

The federal government has promised an announcement on this in the new year. However a senior academic from the Australian School of Business says: "The question is, why would the Federal Treasurer support this, when just last year the Parcel Processing Task Force numbers indicated that it would be very costly to administer a lower threshold on imports, and indeed collecting the tax would cost so much it might actually result in increasing the tax burden. And, secondly why would the Federal Treasurer support a lower threshold unless he can somehow be assured that the State Governments will bear the political kickback that will necessarily flow from this."

Dale Boccabella, and colleague, Kathrin Bain, are presenting a paper on the low value threshold issue at the January conference of the Australasian Tax Teachers Association in Brisbane. The paper will explore the current state of play including developments in administering a lower threshold and the political ramifications of the various options.

"While the government could argue that raising the threshold is an equity measure, even the consumer bible Choice has discredited the big retailers' campaign, citing a measly 12% of Australian online shoppers buying from offshore retailers to save on duties and taxes. Instead most want and enjoy the increased choice of products, and want to buy products that simply aren't available in Australia."

For comment contact
Dale Boccabella on 02 9385 3365 or d.boccabella@unsw.edu.au.

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