This week, the Treasury’s “Low Value Parcel Processing Taskforce” released a report recommending the introduction of the Goods and Services Tax on imported items below the $1000 threshold. It’s something big local retailers have been pushing for to help them stay competitive with our strong dollar and the general lower cost of goods from countries like the United States.
The report is available on The Treasury’s website, but at almost 300 pages, it’s far from a light read.
According to the document, the LVPP’s goals include allowing for “effective and efficient revenue collection processes that promote tax neutrality”, the minimising of “any processing and administration costs, delivery delays and other compliance costs” and supporting “Australia’s interaction with the digital economy”, among others, though I’m not so sure about that last one getting any air time.
Its findings are extensive, but to summarise those related to applying the GST (or other fees) to low-value goods:
[The reform] would best be achieved through the application of simplified GST assessment arrangements for low value imported goods between a separate low value GST threshold set above $0 and below $1000 … This proposed reform aims to streamline the handling and administration of low value imports of goods, while at the same time introducing new processes to collect revenue on goods valued at or below $1000 (to a threshold to be determined by government).
The report admits introducing such processes “constitutes considerable change” and more analysis is required to “determine and implement the required functionality, performance, scalability and integration complexity”.
If such reforms did come into play, the government might not even be able to properly enforce them, given the retailers aren’t based in Australia. From Assistant Treasurer David Bradbury (via The Australian):
“So even if we pass a law in which we say, ‘You have to register for GST’, the difficulty we have is when they thumb their nose at us and say ‘Well, we’re not going to’,” he told ABC radio.
“At that point we have an enforcement issue.”