Monday, June 17, 2024

COAG to pursue reform of GST

Australia’s political leaders have come to an in-principal agreement to broaden the GST to cover overseas online transactions worth less than $1,000, with the decision to be referred to a meeting of Australia’s treasurers in August.

Retail Council CEO Anna McPhee said the in-principle agreement is an important step forward in ensuring goods and services consumed domestically are taxed in the same way.

“Modelling commissioned by the Retail Council and undertaken by EY shows the revenue generated with a no dollar low-value threshold on goods will be substantially greater than the cost of administration under a point-of-sale collection method,” she said.

“Under this collection system, a no dollar threshold on goods will result in a net increase in GST collections of more than $1 billion in 2015/16, rising to $1.7 billion in 2020/21.”

Australian Retailers Association (ARA) Executive Director Russell Zimmerman says that the decision is positive, but further progress beyond must be made quickly to ensure that Australian retailers are “no longer disadvantaged by this loophole”.

“The only acceptable outcome of a broadening of the GST to include overseas online transactions under the current threshold of $1,000 is to eliminate the threshold altogether,” he said.

“The ARA considers the simplest method of collecting this sales tax is at the point of sale. Many international retailers already have mechanisms in place to be able to accept GST at the point of purchase, and we don’t envision that this would involve extra effort on their part, and will not incur any additional costs by the Government.

“While the ARA welcomes this long overdue extension of the GST, it is critical that the process does not stall.”

The Australian Made Campaign has congratulated all the governments on arriving on the decision, which it says will benefit local retailers, manufacturers and producers.

“Eliminating this discriminatory application of the GST will help level the playing field for local products competing with imports,” Australian Made Campaign Chief Executive Ian Harrison said.

“The positive ramifications for Australian producers and manufacturers and the retailers that stock their products will be tremendous if this goes ahead.”

Related Articles

Stay Connected

533FansLike
944FollowersFollow
699FollowersFollow

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.