CHOICE reveals size of proposed 'internet tax'
THE cost of a $20 parcel would rise to over $35 with an online GST, in addition to delays consumers will face for collection, an investigation by CHOICE has revealed.
CHOICE has for the first time revealed the size of the ‘internet tax’ proposed by local retailers, saying consumers and the economy more broadly would likely suffer from such a knee-jerk response.
In a proposed model, the cost of a $20 parcel would rise to over $35 under the ‘internet tax’, with the addition of delays faced by consumers required to pay for collection.1
“You can’t have a cost-benefit analysis that ignores costs to consumers, and right now there are proposals that would charge consumers over $13 for the government to collect as little as $2 in revenue,” says CHOICE Director of Campaigns, Matt Levey.
“Australia does not need a new tax on the internet designed to prop up parts of the local retail sector, hitting consumers with big costs and delays, and dragging down our competitiveness.
“We continue to hear arguments that states are being denied hundreds of millions of dollars in GST revenue because of the $1000 low-value threshold on imported goods, but this glosses over the substantial expense of collecting the tax without reforms to parcel processing.
“The fact is that if you lower the threshold without streamlining the process, you turn every parcel delivery business into a doorstep tax collector, and hand consumers big costs, delays and bundles of red tape.”
CHOICE says that proposals promoted by some retail groups would see consumers foot the bill not only for the GST and parcel delivery, but for the delivery company’s costs in collecting the tax.
The consumer group has repeated its support for a level playing field for local and overseas retailers, but says this should not be achieved by imposing costs that outweigh the benefits.
“This is not about the 10 per cent GST. In many cases it’s an additional 60 per cent or more for collection, along with delays and paperwork,” Mr Levey says.
“Bizarrely, the ‘internet tax’ would not even address the main reasons Australians shop online overseas, which have nothing to do with the GST.”
CHOICE recently released research showing the top reason Australians purchase online is so they can shop at the hours that suit them, followed closely by the convenience of getting products delivered to their door. Only 12 per cent nominated saving on "paying duties and taxes by purchasing on overseas websites".
The GST threshold will be high on the agenda when Treasurer Joe Hockey meets his state and territory counterparts in Canberra tomorrow.