Import threshold tax can in fact be decreased, despite government's initial reservations
Government can afford to cut the $1000 GST threshold to $500
Posted July 26, 2011 | By Aaron Weinman
The government planned to revise the GST threshold for goods bought online from $1000 to $500 in October 2010 and wanted to implement the cut as early as July 1 this year, according to documents released under the Freedom of Information (FOI) laws.
Documents obtained by the Fair Imports Alliance (FIA) indicate that the government sought advice from the Treasury and Customs in an effort to garner possible commencement dates for the GST cut to come into effect.
Brad Kitschke, spokesperson for the FIA said, “The documents disclose that 1 July 2011 was nominated as the start date for a lower threshold, and customs provided advice that a reduced threshold was administratively feasible.”
“The Government has always claimed a lower threshold would be unfeasible, but these documents reveal otherwise,” Kitschke added.
The documents released tell of government research being undertaken into reducing the threshold. Enhanced compliance arrangements have been drafted and the government has compiled a system whereby the import threshold could be reduced in conjunction with the Australian Customs and the Border Protection Service.
The information outlines the figures involved, indicating that systems would take two years to set up, and estimated costs would be $39.5 million between now and 2015.
Jewellers stand to gain if the government does decide to cut the $1000 GST threshold as many local retailers have complained of overseas imported product impinging on their sales. Jewellers Association of Australia (JAA) chief executive Ian Hadassin thinks the threshold should be reduced to $200.
“The extra taxes governments would impose are more than enough to cover the costs. The cost should be $200 rather than $500,” Hadassin said.
“In the UK, these laws are enforced on anything from £25 ($XX). I have talked to Customs officials and they all know how easily people can walk into the country with expensive jewellery,” Dennis Coleman, owner and operator of Melbourne-based Balwyn Jewellers said.
With Australian consumers spending almost $6 billion on offshore online product each year, it is no surprise that retailers have vehemently protested in favour of reducing the import threshold.
“The Government established the Productivity Commission Inquiry and we have to put our faith in that process. We want politicians to have an open mind. We won’t stop fighting for the retail sector and the reform that is needed,” Kitschke said.
More reading:
JAA seeks government action to assist jewellers
Online GST battle gains momentum