Page 29 - Toy & Hobbby Retailer Magazine Nov-Dec 2018

SLOW PROGRESS
Over ten years ago, we and a group of Aussie business owners took it upon ourselves
to campaign the previous Federal Labor Government and the current Liberal Government to have the legislation changed to scrap the $1000 threshold and make consumers pay the same customs handling fees, duty and GST as Australian businesses do.
We met with several ministers from both sides of government with little success, as they appeared to be more concerned about the effect on their votes if they made Aussie consumers pay a little extra for importing goods. They seemed not to worry about the impact the threshold has on Australian businesses and the uneven playing field.
Despite this, we continued with the campaign and got more Australian businesses associations and organisations involved, to put the pressure on to scrap the import threshold in its entirety.
Eventually, the treasurer at the time, Joe Hockey, agreed to change the legislation to scrap only the GST portion of the threshold and to apply GST from dollar one on all imported goods from 01 July 2017. The Labor Government did not support the change as they disagreed with the collection method proposed by the Liberal Government and requested the start date be changed to 01 July 2018.
The proposed collection system is that the ATO will register overseas companies on the same terms as they do in Australia to collect the GST on all sales under $1000. This means anyone selling less than $75,000 worth of goods would not have to register or collect GST.
We contacted one overseas supplier and we were told that this would be easy for them to scam. They told us they could simply set up their staff as sub-businesses and supply their products through those sub-businesses until they got to $75,000 and then move to another staff-owned sub-business and so on.
This means that nothing would change. Australia would continue to be scammed and Australian businesses would still not be able to compete.
Some overseas businesses have also stated that because Australia doesn’t have a matching system in place they will continue to write out invoices for less than what was paid, so that Aussie consumers don’t have to pay as much GST as they otherwise would.
SUGGESTED SOLUTIONS
The ATO and Treasury have stated to us that they would like to get the banks to collect the GST as the transaction takes place online,
however the banks say they won’t know if the goods being purchased are fresh food, medical and dental supplies (which are exempt from the GST), so they can’t determine when to charge the GST.
At a teleconference our business group suggested to them that all Australian businesses have to pay and pass on the GST when they
do their business activity statement (BAS), so it would be easy if everyone pays GST and those that can claim it back, can do so when they do their BAS.
We have also suggested – after minister Peter Dutton declared recently that every parcel coming into Australia costs the government $90 to handle and process – that if there was
a set handling fee, the banks could collect the processing fee at the same time as the transaction takes place.
For example, they could have a processing fee of $10 for all goods up to $100, from $101
to $200 a $20 fee, $201 to $300 a $30 fee and
so on. That would mean that the banks only need to program their computers to process the handling fee and GST at the same time and send that amount to the ATO, which would somewhat help to bring Australian consumers into line with what Australian businesses have to pay to import goods.
WHERE ARE WE NOW?
The current $1000 import threshold is the biggest enemy of many Australian
businesses. The government has now introduced legislation to collect the GST portion of the transaction, but the $1000 import threshold is still in place.
What does this mean? It means that all incoming parcels with an invoice attached for less than $1000 will still go through Border Force with no handling fees and no duty. Ultimately, this means that consumers will still choose to shop online rather than support Australian retailers.
We believe that a matching system – which matches the amount leaving our country to
the incoming invoices – may help combat this problem. Overseas companies would soon learn that Australia is not going to allow them to continue to write false invoices.
Australia’s business community is only asking for the same deal for everyone. If we have to pay all those costs, then so should everyone.
Don’t we all want to see a thriving Australian business environment? ❉
If you want to have your say in Toy & Hobby Retailer, get in contact with Imogen Bailey: imogenbailey@yaffa.com.au
The views expressed in this article represent those of the authors only. They may not necessarily be shared by Toy & Hobby Retailer or Yaffa Media.
NOVEMBER / DECEMBER 2018 TOY & HOBBY RETAILER 29