Applying the GST to online overseas sales of less than $1000 appears more likely after a key federal government minister criticised the existing exemption.
New assistant treasurer, Josh Frydenberg, says exempting overseas online retailers from the 10 per cent impost on goods and services is not fair to taxpayers, retailers and their employees.
“This is not a level playing field,” he wrote in The Australian on Monday, adding local retailers effectively faced a reverse tariff.
Frydenberg argues the $1000 threshold is out of step with other western countries, citing much lower levels in Canada ($C20) and the UK (STG15) and no exemption at all in the United States.
“If these nations can adopt a lower threshold, why can’t we?”
Frydenberg acknowledged the cost of compliance was relatively high, a reason used by the previous Labor government to retain the threshold.
But as online sales increased, that cost would come down, he said, noting recent data.
Between 2008 to 2009 and 2010 to 2011 the number of goods valued below $1000 increased by 58.2 per cent while the number of goods between $1000 and $5000 grew by only 18 per cent.
A good tax system was characterised by simplicity, efficiency and fairness, Frydenberg said.
That was why the online GST threshold would be looked at in the government’s strategy review of the tax system.
The willingness on the part of governments, federal and state, to deal with the issue was a test case for the nation’s ability to adapt to the growing digital economy, he said.
AAP
