The National Retail Association (NRA) has welcomed today’s in-principle agreement from heads of government to close the GST loophole which currently gives an unfair advantage to overseas businesses.
NRA chief executive officer Trevor Evans says while there was still some work to be done to finalise the details, retailers could now see the light at the end of the tunnel after a long campaign.
He says it is ironic that the Federal Government had received a mandate to move on the issue on the same day as the ABC announced it was closing its retail operations, partly due to pressure from on-line overseas sales.
“The NRA has campaigned long and hard on this issue over many years, and we are very pleased to see an agreement to solve the problem,” he says.
“The so-called low value threshold (LVT) has been nothing more than an excuse for overseas retailers to target the Australian market without needing to contribute to tax revenue in this country.
“It has been a factor in the closure of a lot of retail businesses, including the national network of ABC Shops.
“Independent research has shown that it has cost tens of thousands of local jobs, and stripped hundreds of millions out of revenue for Federal, State and Territory Governments.
“So we very much welcome this announcement today, and the retail sector stands ready to work with the government to assist with implementing this long-overdue measure.
The Australian Retailers Association (ARA) agrees that action on this issue must not be delayed.
While the move is a step in the right direction, the ARA maintains that further progress beyond this agreement must be made quickly, to ensure that Australian retailers are no longer disadvantaged by this loophole.
“The only acceptable outcome of a broadening of the GST to include overseas online transactions under the current threshold of $1000 is to eliminate the threshold altogether,” says Russell Zimmerman, executive director of the ARA.
“The ARA considers the simplest method of collecting this sales tax is at the point of sale. Many international retailers already have mechanisms in place to be able to accept GST at the point of purchase, and we don’t envision that this would involve extra effort on their part, and will not incur any additional costs by the government.
“While the ARA welcomes this long overdue extension of the GST, it is critical that the process does not stall. The agreeance of state premiers is a good start point, however, it must also be backed up by State Treasurers at their meeting next month,” Zimmerman says.
“Australian retailers have suffered too long with the uneven playing field the LVT has created, giving international retail businesses the upper hand in our own market, and it is critical that an end be put to this as soon as possible, with the complete elimination of the threshold.”