Australian treasurers to discuss online shopping tax

Summary:The issue of applying the GST to goods purchased by Australians through overseas online stores will be on the agenda when Federal Treasurer Joe Hockey meets his state and territory counterparts on Wednesday.

Moves to slap GST on overseas online shopping purchases worth less than AU$1000 will be on the agenda when Federal Treasurer Joe Hockey meets his state and territory counterparts this week.

The treasurers will meet in Canberra on Wednesday from 8:30am (AEST) for the Standing Council on Federal Financial Relations, the first since the change of government.

A spokeswoman for Hockey said the meeting will focus on economic growth and ways to increase productivity.

The AU$1000 threshold at which the GST is collected on goods and services purchased from abroad will be on the agenda.

The treasurers will consider potential options on collecting the GST on online transactions if the threshold was to be lowered.

Australian businesses argue that while online shopping from foreign outlets may comprise a small component of the overall retail sector, it's a fast-growing trend being supported by an effectively GST-free status on less expensive items.

The previous Labor government argued that significant reforms were needed within the tax system to handle the job otherwise the cost of collecting the tax would outstrip the revenue collected.

NSW Treasurer Mike Baird said his state had been pushing for reform on the low-value threshold on GST for online overseas purchases for a long time.

"It is about time we had a genuine discussion on the issues that matter and it's clear that under the new federal government this is what we are going to see," he told AAP.

Earlier this month Hockey indicated the government would not proceed with changing the low-impact import threshold for online sales because the business case had yet to be assessed.

The former Labor government reported that based on 2011 import levels of 58 million parcels entering Australia under AU$1,000, the cost of setting up a system to process those parcels would negate the potential gains the government could extract from the extra GST revenue.

The treasurers are also expected to discuss infrastructure partnerships and the economic and fiscal outlook.

Topics: Government, Australia, E-Commerce, Government : AU

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.