AMA Member retailers and suppliers will welcome the news that the federal government has placed the low value GST threshold back on the public agenda. After years of railing against the unfairness of the LVT threshold on imports on Australian small business our members can see light at the end of this very long tunnel. The headline here should say online shoppers who shop overseas would pay 10% more! Aussie online retailers must charge 10% GST on all sales.just like bricks n mortar stores.
In Australia a purchase from an online site overseas must exceed $1,000 before GST is payable. This, in effect, gives overseas retailers a 10% price advantage over local retailers – both online and bricks n mortar. In the UK, the threshold is twenty pounds, in Canada it is minimal too.
Assistant Treasurer Josh Frydenberg says the upcoming tax White Paper will take another look at the issue.
“It makes sense to have a serious look at this from a jobs perspective because the retailers are such big employers,” he said
See article here – http://www.theage.com.au/federal-politics/political-news/new-push-to-impose-the-gst-on-online-purchases-20141226-12dvw2.html
text of article appearing in The Austrian newspaper
December 26, 2014
AUSTRALIAN retailers want items bought from overseas websites for as little as one cent to be subject to the GST.
NEW Assistant Treasurer Josh Frydenberg says the federal government will consider whether to apply the tax to such low-value purchases as part of its white paper process in the new year.
Goods purchased online worth less than $1000 are currently not subject to the 10 per cent GST.
Local retailers, many of whom have online sales sites, complain it’s unfair because the loophole gives overseas retailers a price advantage.
Australian Retailers Association head Russell Zimmerman said the current GST-free threshold has “done nothing but damage our retail sector” and would like to see it scrapped altogether.
“I think it’s vital that the government does something on this very quickly,” he said on Friday.
“The threshold should be at least $30, but preferably down to zero.
“If it was brought down to zero, obviously all the books that come into Australia would be captured.
“But we’ve got some great online and bricks and mortar retailers.”
Myer chief executive Bernie Brookes welcomed the planned review, claiming current regulations are only serving to boost job numbers overseas – not locally.
Australia’s largest department store collects more than $300 million in GST every year, plus corporate tax.
“The problem is, we’re competing against people throughout the world that aren’t paying that level of GST and tax,” Mr Brookes told AAP.
“There’s no extra money in it for us if the GST is on or off – the reality is it goes to the government.
“And if the government is struggling to be able to balance things, then there’s a $1 billion in potential income through being able to put the GST online.
“The government at the moment are doing a really good job creating jobs – but they’re creating jobs in Birmingham, England, they’re creating jobs in Los Angeles, they’re creating jobs in China.
“They’re not creating jobs in Australia because of the free kick they give all these people.”