THE NSW Treasurer, Mike Baird, is proposing a dramatic lowering of the GST-free threshold for goods bought online from overseas retailers in a move that would raise hundreds of millions of dollars in extra tax.
Mr Baird wants the Commonwealth to look at cutting the threshold from $1000 to about $30 to capture millions more transactions in the GST net and bring Australia into line with countries such as Britain.
The move, which was a recommendation of the Productivity Commission report into retailing last year, would add 10 per cent to most international online purchases.
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In Britain, value added tax is payable on most online purchases worth more than Ģ18 ($28). In Canada the threshold is $C20 ($19) and in the US it is $US200 ($187).
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The report estimated that at a threshold of $100 it would cost about $15 per item to collect $22 in GST. By 2018, as volumes increased, the cost per item would fall to below $14 and the GST collected would rise to almost $23.
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Unfortunately what isn't mentioned here (and fair enough, the journo wouldn't know) is that every parcel will not just be charged the GST - they will also be charged customs processing fees.
Currently, from Australia Post, these are $159.70 in total (customs + brokerage + quarantine charges) per parcel.
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