Right now you don't pay GST on anything from an overseas store worth less than $1000. There's a good reason for this: it costs the government more to collect these payments than they'd make back.
Collecting a $38 parcel bought online could cost you an extra $17.80 once you include GST and parcel processing fees. Worse still, there's a proposal to have you pay this fee at the post office every time you're sent a parcel.
That's why we're calling for proof that changing the GST low value threshold is worth the costs of collection.
The story so far
Some Australian retail groups are calling for GST collections on all overseas purchases. But current research says the government will spend more money than it makes collecting GST on purchases under $1000.
The government claims lowering the threshold will help Australian businesses compete with online stores. Yet our research shows most consumers shop online for convenience and access to more products. Not to avoid taxes and duties.
Treasury is currently producing a business case for lowering the threshold. We'll be following that process closely.
- In October 2012, a review panel recommended lowering the GST low value threshold. Since then we've campaigned to show that the costs involved in lowering the threshold will be higher than any money made.
- In late 2013, we surveyed consumers, to see if the claims round the GST stacked up. We found that consumers generally don't buy online to avoid taxes. On top of that, most consumers were saving more than 10% (the GST rate) on online purchases anyway.
- In 2015, we conducted a survey of available research into the proposals to lower the GST low-value threshold, and submitted this research to the federal government's tax discussion paper; Re:Think. We found that lowering the threshold could significantly raise the prices that consumers pay. For instance, bestselling novel The Girl On The Train can be bought online for $20.31. With $2 in GST added, plus a processing fee of $50 (based on a Productivity Commission analysis), the book would cost $72.34 – a markup of 256%.