ARA to work on low value GST compliance


The Australian Retailers Association has said it will work with government to ensure compliance with a controversial new tax on low value imports.

International retailers will be forced to collect and remit GST on imports valued at under $1000 under the new regulation, which comes into effect next week.

ARA executive director Russell Zimmerman, who lobbied for the changes for several years, has joined a chorus of local retailers saying they are looking forward to the changes.

Proponents of the legislation believe large international retailers like Ebay and Amazon have been unfairly advantaged by not having to charge GST on many products they’re selling to local shoppers.

“We’re hoping this tax fairness will give a much-needed boost to the industry and we will continue to work with the Government to ensure a 100 per cent collection rate,” Zimmerman said on Thursday.

But amid longstanding concern from impacted retailers, including Amazon, Ebay and Alibaba, that it will be difficult to ensure high rates of compliance with the legislation, Zimmerman said the ARA would work with government to ensure a good outcome.

Zimmerman said discussions with government and the ATO would include proposing additional collection models to improve compliance.

International retailers are scrambling to ensure that they are compliant with the changes, having complained that it would be difficult to chase down the thousands of third party sellers on their networks to ensure GST was being charged.

Ebay announced it would work on a solution allowing it to collect GST from buyers purchasing in any currency, from any of its sellers.

Amazon, on the other hand, will redirect any customer within Australia to the company’s Australian online shop – effectively barring them from the more robust US store.

“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” Amazon said in a statement last month.

Treasurer Scott Morrison said the legislation would ensure multinational corporations paid their fair share of tax in Australia.

“If [they] aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia, on our own main streets and in our shopping centres,” Morrison said in response to Amazon’s decision.

During consultations Ebay cited Treasury modelling that found a so called ‘vendor collection model’ would yield a tax compliance rate as low as 25 per cent.

Marketplaces last year offered an alternative model whereby Australia Post and others would have collected GST on purchases when they came into the country, but the postie said it would have been a massive burden on its operation.

KPMG, commissioned by Amazon, produced modelling that predicted compliance rates as high as 70 per cent under a logistics model.



1 comment

  1. Avatar

    Steve Smith posted on August 1, 2018

    What an absolute mockery of our Anti Competition laws in Australia. The result of these GST changes is international retailers will stop selling to consumers in Australia because they (a) will not want to register for an ABN/ARN, (b) will not want to make changes to their systems to charge, monitor, report and pay the collected GST, (c) the choice to not sell to Australian consumers, and as a by-product Australian businesses, is easier than compliance. I am currently seeing many overseas online businesses just turning off shipping options to Australia....period. Australian registered business do not sell everything available in the world. So Australian consumers will soon be unable to purchase goods from overseas suppliers, that aren't sold here in Australia, simply because suppliers will refuse to sell to Australian consumers.....yes, each supplier still has to monitor for the $75K ceiling. Was any research done with smaller suppliers to see how they would react to this change? I doubt it. Australians will now be isolated again, taken back to 70's, when the only things they can purchase are those supplied by an Australian business. This will inevitably lead to less competition, monopolistic price gouging, reduction in competitive price parity with Australian companies increasing their prices through lack of international competition. Did anyone in the Productivity Commission think about this? Or were they only concerned with the idea of increasing ATO Revenue? I predict revenue from low value imports to consumers will drop 75% this financial year as most international online stores will simply turn off shipping to Australia. Many consumers will no longer be able to buy products that are not available in Australia. Welcome to the Stone Age everyone. Maybe we should just revert to local shopping only while we're at it, no online shopping, store fronts only. The lack of thought on this GST change astounds me. reply

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