In yet more evidence that ScoMo has lost the plot, he has announced the imposition of GST on low value items bought from overseas even though the bureaucrats can’t figure out how this will work and the start date is 1 JULY 2018. That’s right, over twelve months away. My advice would be stay quiet on this until the details are worked out.
As Sinc has pointed out, this is just a tax grab with no merit. After all, the overseas suppliers are unable to access any input credits and so this tax is just 10 per cent retail tax.
The Productivity Commission had warned against its imposition, citing in part the high transactions costs of collecting the tax. Australia Post is unwilling as are other carriers.
But why waste an opportunity when ScoMo can do the party’s base in the eye yet again.
Delivering a fairer playing field for Australian businesses
Turnbull Government (sic) laws will level the playing field for Australian businesses by applying the GST to goods costing $1,000 or less supplied from overshore to Australian consumers from 1 July 2018, following passage of legislation in the Parliament today.
The Australian Government (sic) has delivered a win for Australian retailers, by removing the unfair advantage foreign businesses had with respect to GST. A level playing field will help Australian businesses grow and create more jobs and opportunities.
Using a vendor collection model, the law will require overseas suppliers and online marketplaces such as Amazon and eBay with an Australian GST turnover of $75,000 or more to account for GST on sales of low value goods to consumers in Australia.
This start date strikes a balance between giving additional time for industry participants to make the system changes to implement the measure, and not prolong the current uneven GST treatment faced by domestic retailers.
Removing a distortionary tax advantage to foreign businesses will restore integrity to Australia’s tax system to close down loopholes and prevent tax avoidance.
The legislation complements other tax integrity measure of the Turnbull Government to ensure foreign businesses pay the right amount of Australian tax such as the Diverted Profits Tax and applying GST to digital goods and services purchased from offshore websites.
The GST collected from this measure will go to States and Territories to fund essential services. The States and Territories have been strong supporters of this measure (no kidding), and unanimously approved the vendor collection model in this Bill.
The Turnbull Government is committed to ensuring that Australia’s taxes are working as intended and individuals and companies pay their fair share of tax.