Hinchinbrook MP, Andrew Cripps, says despite the squabbling between Federal and State Treasurers at recent COAG meetings over GST arrangements, there were less controversial reforms that could increase government revenue and benefit Australian businesses.
Mr Cripps said there had been several reports published about an issue that was undermining the integrity of the Australian tax system – the threshold for GST to be charged on goods and services purchased online internationally, but delivered and consumed locally.
“I’ve had quite a bit of feedback, particularly from small businesses in my electorate of Hinchinbrook, that they are finding it difficult to compete with more people shopping online and purchasing goods and services valued at less than $1,000 from overseas” said Mr Cripps.
“Not only does this loophole have a negative impact on Australian retailers, especially small businesses, but it also reduces GST revenues to state budgets across Australia through lower GST receipts and that is something all State Governments are screaming about” he said.
“Closing this loophole would help level the playing field for Australian retailers and suppliers, help to stop multinational companies from shifting profits overseas and provide relief to domestic businesses, which are shouldering a disproportionate level of the tax burden” said Mr Cripps.
“At the same time, it would also provide State Government’s with additional funds to build more and better infrastructure and provide services for communities – all without introducing a new tax – so this type of reform should be low hanging fruit that COAG could safely pick” he said.
Mr Cripps said the Australian National Retailers Association estimated that $1 billion of revenue to governments was being lost each year through this loophole and they expected that figure to rise in the future, as international retailers continue to increase their online marketing.
“The Commonwealth, with the support of the States, is exploring options around lowering the threshold, but there is more work to be done and it’s hoped this issue will be further progressed as part of the Federal Government’s 2015 Tax White Paper process” said Mr Cripps.
“There are complex economic, political and social issues associated with a serious tax reform debate in Australia, but making sure GST is paid on items purchased online, valued at less than $1000, should be something even these bickering Treasurers can agree on” he said.