Online GST in the spotlight

Online shoppers might soon have to fork out a little extra for bargains they buy from overseas websites.

A taskforce report released on Thursday has spurred retailer calls for the federal government to level the playing field between bricks and mortar shops and online competitors.

Currently, if someone buys imported goods online valued at $1000 or less they don’t normally pay GST.

It’s an arrangement that’s been branded unfair by many traditional retailers in Australia, who feel they can’t compete with the prices offered by online stores.

But retail groups who met with the federal government on Thursday to discuss the report, published by the Low Value Parcel Processing Taskforce, seem confident change is on the way.

The Australian National Retailers Association (ANRA) said there were significant revenue opportunities in lowering the GST threshold from $1000 to $100 and called on the government to act swiftly.

“This is a thorough report which states a clear case for change,” ANRA chief, Margy Osmond,said in a statement.

“The sector cannot afford to lose more crucial Christmas trading periods before we see a level playing field for Australian retail.”

The latest findings follow a Productivity Commission report that concluded the GST threshold wasn’t the main factor affecting the international competitiveness of Australian retailers.

But it said there were “in principle” grounds to introduce GST for cheaper goods, though it wasn’t yet cost effective to do so.

Osmond said the taskforce report showed significant revenue could be raised by state and federal governments worth millions of dollars.

The Australian Retailers Association (ARA) claimed governments were missing out on up to $272 million in revenues.

Russell Zimmerman, executive director, ARA, said the report highlighted the need to address and remove the inherent disadvantage the LVIT currently presented to Australian retailers as well as open up a desperately needed revenue stream for state and territory governments.

“The ARA welcomes the report’s recommendation to address parcel processing inefficiencies with better border protection and collection processes, which will help close the current revenue trapdoor causing state governments to miss out on millions of dollars in valuable income.

Between 2010 and 2011, there was a 134 per cent surge in goods brought in by air cargo to Australia valued between $100 and $200.

AAP

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