Consumers lose under "internet tax"

[DU99]

Australians have been warned they will pay more and wait longer for online purchases from overseas if the GST threshold on imported goods is lowered.
The nation's treasurers will gather in Canberra on Wednesday to try and thrash out an agreement to lower the $1000 threshold.
Local retailers want to see a more level playing field given many foreign goods are GST-free under existing rules, while the states and territories argue they are missing out on much needed GST revenue.
But consumer advocate CHOICE believes consumers and the economy will suffer from what it labels an "internet tax".
"Australia does not need a new tax on the internet, designed to prop up parts of the local retail sector," CHOICE director of campaigns Matt Levey said in a statement on Tuesday.
If the threshold was lowered to $20 and Australia adopted the UK's assessment process the cost of a $20 parcel would rise to more than $35.
The UK Royal Mail charges a STG8 ($A13.60) fee for assessing a parcel for VAT and customs liability.
"If you lower the threshold without streamlining the process, you turn every parcel delivery business into a doorstep tax collector," Mr Levey said.
"Bizarrely, the higher threshold would not address the main reasons Australians shop online overseas, which has nothing to do with the GST."
CHOICE research shows the main reason Australians buy online is so they can shop at the hours that suit them, followed closely by the convenience of getting products delivered to their door.
Only 12 per cent nominated saving on duties and taxes.

Another Tax we didn't have to have.The gerry harvey's of this world might be happy

 

[punkin]

Can you explain how the GST is "another tax" ? We already have a GST they are just talking about closing a loophole in cases where it's not being applied.

 

[Bubba Q]

the gerry harveys won't be too pleased when they realise that customers are actively boycotting their stores due to their constant bleating and asshattery

 

[Ducatiboy stu]

Even with gst its probably still going cheaper anyway. But implementing it wont be easy.

 

[nu_brew]

The reason this tax was not collected in the first place was that the cost of collecting it is more than the cost recovery. There will no doubt be a processing fee as in the UK to cover the short fall. So in effect you will pay a fee so that you can pay GST.

 

[punkin]

And you don't think we already pay these fees? Just that we now pay them on shipments over $1000 and not under.

As i said, nothing new, just a loophole being closed...





And yes, in the interests of disclosure i am an importer, but no you cannot buy my products from overseas. I also am a reasonably frequent user of the loophole if the savings are significant enough to warrant the cost for me.

 

[Ducatiboy stu]

As Kerry Packer famously quoted " Anyone who doesnt minimise their tax needs there head read"

 

[MAX POWER]

Nu_brew is spot on. Nobody wins if they abolish the threshold. Not even gerry harvey. $100 extra on a o/s purchase would still be much cheaper in most instances than buying here.

 

[Freebs]

Pretty dumb really. The cost of collection will be far more than is collected, especially under $100 so the taxpayer will actually lose to make primarily the big retailers happy. There is also an assumption that people will buy the same stuff locally. I reckon a fair few just won't buy.

 

[Yob]

I had to pay a "textiles" tax to import my hand made kilt from Scotland to "protect the local industry" he even agreed that ther was no local industry of Kilt makers... but charged me the coin anyway... naturally

 

[Ducatiboy stu]

You only payed because you where honest. Imagine how many that dont

 

[wbosher]

They were talking very seriously about doing the same thing here a few months ago, the Govt's been talking it up it for over a year . Haven't heard anything for a while now, maybe filed in the too hard basket.

 

[Spiesy]

FFS, it's protecting local jobs. Sorry but this short-sightedness really grates with me.

I work in wholesale, and we pay GST on goods worth $1; and we employ Australians, support local businesses and pay more taxes than just GST. But somehow it's okay for Joe Public to import anything under 1k, tax free.
Not to mention sometimes "Joe Public" is actually a small time local business just grey importing, selling direct and undercutting those forced to play by the rules.

We have the highest tax-free threshold in the developed world and retail sales in Australia are pretty horrible right now. Speak to anyone in retail or wholesale, it's bloody tough.

 

[Spiesy]

Pretty dumb really. The cost of collection will be far more than is collected, especially under $100 so the taxpayer will actually lose to make primarily the big retailers happy. There is also an assumption that people will buy the same stuff locally. I reckon a fair few just won't buy.

One of the companies that investigated this claimed that this was incorrect.

Can't remember who it was though.

But what's for sure is that the cost analysis does not take into account the general boost in the local economy through increased local retail sales. Which would result in more payroll and salary tax payed back to the Government and less money paid out to social services (i.e. unemployment benefits etc.).

 

[Wortgames]

Hi Spiesy, if you're really lucky then the customer will choose your product based on advertising you pay for, look at it in one of your dealers' stores, then buy it online from a grey importer putting your dealer out of business in the process.

Then if you're really lucky, they'll come and abuse you when something happens in the warranty period and expect you to carry the spares.

Yep, it's a great time to be an Aussie wholesaler.

 

[GuyQLD]

Because implementing a tax to encourage people to pay another tax makes sense right?

Not trying to take anything away from the retailers here, but does anyone else no see this as slightly delusional? I'm not against tax in general but these sorts of bandaid solutions which only serve to make more revenue under the guise of "assisting the aussie battler" highlight to me the need for someone to take a good hard look at it.

Closing a loophole doesn't wash with me either. Why the hell was it created that way in the first place?

 

[Spiesy]

Because implementing a tax to encourage people to pay another tax makes sense right?

Not trying to take anything away from the retailers here, but does anyone else no see this as slightly delusional? I'm not against tax in general but these sorts of bandaid solutions which only serve to make more revenue under the guise of "assisting the aussie battler" highlight to me the need for someone to take a good hard look at it.

Closing a loophole doesn't wash with me either. Why the hell was it created that way in the first place?


They're lowering the threshold of an existing tax to ensure everyone pays it.

Who knows why the loophole was created. People never had to wear seatbelts or helmets on bicycles either, doesn't mean those laws (or lack of) were sound.
I'd imagine, and I'm only guessing, that the loophole was created as it would have been too hard to enforce and the G couldn't be arsed.

We've come a long way since then and technology can assist in policing as closing the loophole.

 

[warra48]

I buy stuff locally, if it's available.

I buy stuff over the net if it is not available locally.

If the local retailers or suppliers don't stock a product I'm after, then when I buy it over the net, how can they argue they are losing out?

I'm convinced the cost of collecting up to a maximum of $100.00 in GST will on average be more than the tax collected. Of course, we will also be slugged with a fee, but is it really worth all the bother in the end?

As for it being a loophole, I disagree. It was a sensible baseline for collecting GST on imports.

 

[nu_brew]

Pretty sure Choice debunked the myth that GST on small online purchases would force people to buy locally.

 

[Airgead]

I'm in a provocative mood today.

If I can import one of something from the manufacturer and pay about half what a local retailer charges then there is something wrong with the retailer. If you want to compete on price, the retailer should be buying in bulk (and shipping in bulk) so their price should be lower. If you want to compete on price, compete on price. Reduce overheads. Go online and compete that way.

Or you can provide a superior shopping experience. I am happy to pay for that if you give me some actual service. Have staff who know something about the products and can explain stuff to me instead of looking blank.

Local retailers (generally... not all) don't want to compete on ether price or service. they just want people to be forced to use them. That's BS. i'll buy online from overseas thanks very much.

Apologies to those who work in wholesale but the local wholesaler is a dead business model. Get out while you can. In fact the wholesaler business model is dead globally. If I ran a retail outlet, why would I go to a wholesaler when I can buy direct from the manufacturer and cut out the middle man? Except of course where restrictive terms of trade force me to? Wholesalers are a throwback to a time when shipping was unreliable and expensive (the days of sail) and when consumers couldn't contact manufacturers directly. They add zero value these days and will be gone within a decade.

<Dons flameproof suit and waits>