Labor calls for delay of GST collection on low-value imports

The Australian Opposition has said the changes to GST collection on goods worth less than AU$1,000 should begin in July 2018.
Written by Chris Duckett, Contributor

The commencement of GST collection on imported goods worth less than AU$1,000 should begin a year later than scheduled, the Australian Labor Party has said.

Shadow Treasurer Chris Bowen said the party still backs the idea of GST collection on low-value imports in principle, but said the government had failed to create a workable model.

Bowen said the new pronouncement came about after Friday's Senate Economics Legislation Committee hearing, where its senators were told that Treasury did not have a Regulation Impact Statement.

"The Australian Taxation Office, lumbered with a vague plan by the government, were left to explain that jurisdictions like the USA and China will not enforce the measure on their behalf," he said. "Platform compliance is largely reliant on the goodwill of overseas operators."

"eBay claimed that Treasury officials had told them they expect a 25-30 percent compliance rate."

On Friday, eBay said the process around GST changes had been "one of the least open" in recent times.

"Certainly if you compare it to the Netflix tax, they were given a very lengthy period of time to determine how the actual Bill that was released on Budget night would apply to them and what they could do," an eBay spokeswoman said.

"What we're being asked to do here is as the Bill was introduced into the House of Representatives in February, and we're being asked to comply by 1 July -- it's near impossible."

Under the changes set to come into effect on July 1, online platforms such as eBay, Alibaba, Etsy, and Amazon would be responsible for the GST collection of platform users who sell over AU$75,000 worth of goods into Australia annually.

"Most organisations that have an obligation to comply, will," representatives for the Australian Taxation Office (ATO) said.

The ATO did not dismiss the idea of using website blocking to enforce the collection of GST from online platforms.

"We think where we will have to apply these strategies will be in very limited circumstances and where they don't [comply], we will work through a series of compliance strategies," the ATO said.

"I'm aware the [website blocking] provision exists, the ATO hasn't applied that provision previously, so at the end of the day we'd have to look at whatever was available to the ATO as we progress down the path of encouraging organisations to comply."

eBay's managing director Jooman Park said he isn't sure his company can build tax collection capabilities on its platform specifically for Australia.

Representatives for Alibaba said the current model is unworkable and "contrary to good international tax policy", with a spokesperson saying he wouldn't be surprised if overseas vendors stopped selling into Australia.

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