Reducing the $1,000 GST threshold not worthwhile: Productivity Commission

Published on Mon, 04/04/2011, 01:06:36

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By Keri Algar

SYDNEY, NSW: Retailers hoping for a lowering of the $1,000 GST free threshold for overseas online purchases have been dealt a blow in the Productivity Commission's preliminary conclusions.

Significantly, the Commission has found that the average value of parcels entering Australia is under $100.

“Based on the preliminary evidence available to date, it appears that even a large reduction in the threshold may not necessarily have a significant impact on the number of parcels not subject to GST and duty,” said the report.

It lists a number of logistical reasons, such as the practicalities and costs of collecting taxes on small parcels and the knock on costs for retailers and consumers, for why even a large reduction in the $1,000 GST threshold might not beneficial for consumers or retailers.

The Future of Australian Retail, one of nine inquiries currently being undertaken by the Productivity Commission, released its first issues paper last week. It details Australia’s present retail landscape, challenges and future directions, to assist retailers and interested groups make their initial submissions.

The paper said that the extent of the impact from offshore online retailers is still unclear, but that Australian retailers could benefit from consumers’ preference for using domestic websites.

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The Commission is conducting a three month trial by the Australian Customs and Border Protection Service to gather the information.




It perplexes me that the government is not interested in recuoping the lost GST to overseas internet sales which we all know occurs at a great volume. Lets face it consumers can still save considerable money from overseas purchasing and even with a GST included, all this piecemeal action has to add up to a sizeable pot of gold. I understand Julia Gillard has indicated her belief that the cost of compliance would outstrip the revenues raised. It is my understanding that compliance is fairly straightforward with the Australian Government simply needing to formally advise all credit card and payment providers that anything shipping to an Australian address must incur GST. Apparently many many countries use this such device to prevent the plundering of their populace by foreign business's who benefit financially but actually don't contribute anything back to the community (like jobs,rent,buiding & other economic factors).
Posted by Tony Davey. 08/04/2011 09:47:14 PM
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