Harvey Norman MD criticises govt "loophole"

Published on Tue, 17/01/2012, 03:11:41

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By Claire Reilly

Harvey Norman’s managing director has criticised the Federal Government for “not closing the tax loophole” that allows consumers to purchase goods from overseas valued under $1000, without paying GST.

Speaking to The Australian, Katie Page, who is married to Harvey Norman founder Gerry Harvey, also criticised the online retailers who were benefiting from the $1000 low value import GST threshold.

“You can get things shipped in from overseas and not pay GST, not pay compliance tax and not pay company tax,” said Page. “International online retailers are getting away with no contribution to the Australian economy.”

“We have to get this in perspective. Governments are losing a lot of tax by not closing the tax loophole.”

But Page was not totally against online retail, saying it was “the evolution” of the traditional bricks-and-mortar model. She also came out in defence of Australian retailers, who she said were being unfairly criticised for not being quicker to jump on the online bandwagon.

“The retail industry employs 1.2 million people – it is the biggest employer outside the public service,” she said. “Yet we are treated badly. We are viewed as Luddites as we have not embraced online shopping.

“Online retail is the evolution of the business of physical stores.”

Page’s comments are curious, considering Harvey Norman’s recent forays into the online world. While the company went live with its e-commerce venture in November, it also quietly launched a direct import website just three days before Christmas last year.

On the Harvey Norman Direct Import website, the company expressly states that prices on products are “exclusive of applicable taxes”. As the products are shipped from Harvey Norman Ireland, GST is not included in the sale price. In addition, because the website only sells games for consoles such as Xbox and Playstation, prices are well below the $1000 low value import threshold – and thus fall through the “loophole” that Page described.

The website’s Terms of Use state that “Taxes may be levied...by any one or more of the tax or customs authorities in Australia , the United Kingdom and Republic of Ireland.

“You will be the importer of the goods for the purpose of customs and border processing and, as the importer of the goods, you are liable to pay such Taxes to the relevant authority in addition to your payment to HNI [Harvey Norman Ireland]."

However, these terms also state that it is the consumer's "responsibility to determine" whether any taxes would apply in either Australia, Ireland or the United Kingdom.

This article first appeared on Current.com.au


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The whole Harvery family are a joke. I loved the heading in the news over chrissy "It aint christmans without Gerry whining" Yes she absolutely is contradicting what her husband is doing with his gaming website...But seriously they'll soon shut up if we stop printing everything they have to complain about, which is a lot!
Posted by Jb. 18/01/2012 03:34:42 PM
When Gerry was making his fortunes from the Australian public, he could not have been happier. Now that times are tough, he is blaming online shoppers for his business not doing so well. People just don't have the extra money and are looking for the best price on an article. Gerry sent a lot of small family owned businesses down the tube over time. Family owned furniture shops, computor stores have dissapeared over the years. He did not care one bit about these people that may have been dearer the Harvey Norman, but you always got great service. I there was a problem they fixed it.
Posted by Ken. 18/01/2012 04:20:16 PM
The answer is very simple any consignment arriving from overseas should have an impost of $150 on all values under $1000. If someone wants to claim back the difference they can do so with their own time. This would discourage overseas shopping and raise tax for the Australian economy. All professional importers have to pay GST and duty why not small imorters. Clearly the situation is not fair to anybody other than consumer who have no wish to pay legitimate taxes.
Posted by Peter. 18/01/2012 05:17:45 PM
Import duties and taxes have been exempt for many years now on goods under $1000.(imagine the extra public servants that would be needed to collect taxes on low volume items) We have not heard in the past Gerry Harvey complaining about all the cigarettes, perfume, small electronics and liquor that comes in duty and tax free by air and boat passengers. No that was not interfering with his profits. Many small income families are not in a position to travel and benefit from these exemptions. Now that low income families are able to save a few dollars by buying from overseas on the internet these greedy sh--- want to have it stopped. It is about time the likes of Harvey Norman looked how they can sell their products cheaper in Australia. Rents are some of the highest in the world that combined with all the franchise fees and charges on suppliers no wonder their businesses are slowing. Stop whinging and get on with life, everything changes in time.
Posted by Peter Connors. 18/01/2012 09:46:52 PM
Peter and your ilk - will you be sorry when your children cannot find work in Oz because there are no more retail outlets who provide the vast majority of "training" for young people. Your money is leaving Australia and you are not batting an eyelid. Time to grow up and see the big picture, peoples. Online shopping should be a very small part of your life. People who go into stores, try on clothes/shoes/etc and then buy them cheaper online are only ripping themselves off and ripping their children off in the long term. We know the world is changing but each of us has a duty of care to our own country, surely???
Posted by JUNE CARTER. 15/03/2012 04:28:40 PM
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