Hockey finds way to collect GST on Australian imports
Treasurer Joe Hockey believes he has found a way to collect GST on parcels imported into Australia.
Collecting GST on imported goods has been long debated, since internet shopping grew in prominence, but has repeatedly been seen as not cost effective.
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But Hockey has told a Melbourne conference that as a result of consultations with the United Kingdom, and a number of other jurisdictions, he believes there is a new way of collecting the GST on imported parcels and goods, which he will share with state premiers when they meet in August.
As well as applying the GST to imported physical goods, the government is also wanting to apply the tax to digital items as part of its budget measures.
Hockey said in May this year that the measure would raise AU$350 million over the next four years, and would only impact a "comparative handful" of companies that sell digital books, music, TV shows, films, and subscription services such as Netflix.
The former Labor federal government conducted a GST review in 2012, with the report recommending the GST threshold for online purchases be lowered from AU$1,000 to AU$500. At the time, Assistant Treasurer David Bradbury said the cost to taxpayers of collecting GST on low value parcels would outstrip the revenue gained as a result.
"With around 58 million parcels entering Australia under the low value import threshold each year, lowering the threshold before putting in place significant reforms to processing capabilities would cause major disruptions to the international mail service and result in major inconvenience to the businesses and consumers that rely upon it," he said.
The former government said it was committed to the threshold until efficient systems became available, only to reverse course weeks later saying it would look at lowering the threshold.
In April, Treasury deputy secretary Rob Heferen told a Senate inquiry that compliance costs would be very low if international providers of imported goods had to register and simply pay the GST.
"Australia wouldn't need the agreement of any country to do this. The federal government would need the agreement of the states and territories," said Heferen.
With AAP.