The move would be necessary for eBay if it is to comply with legislation
due to be introduced on 1 July, says Jooman Park, the managing director of
"Regrettably, the Government's legislation may force eBay to prevent
Australians from buying from foreign sellers," says Park, in his submission to the Senate
"No tax would be paid to Australia and none would be owed. It would raise
no revenue, deny Australians access to choice and lessen price
The introduction of the tax was seen as a way to help brick-and-mortar
retailers compete against overseas rivals, but Park disagrees the
introduction of the tax will help local businesses.
"This solution would not even represent a win for bricks and mortar
retailers, because Australians would still find ways to buy online. They
would do so direct via dot.coms without paying GST.
"This appears to be the most likely outcome at present."
The government announced imported products below $1000 will be subject to
the Goods and Services Tax (GST) as part of the 2016 Federal budget, in a
measure expected to generate $300 million in its first three years.
The tax will help drive growth in the retail market, says Russell
Zimmerman, the executive director of Australian Retailers Association, the
peak body representing 7500 retailers.
"We support the legislative basis which would see offshore suppliers of
tangible goods and services collecting and remitting GST to the Australian
Government," says Zimmerman, in a submission to the Senate inquiry.
"This is a modern approach which will defer administrative costs from
The idea of taxing goods below $1000 was abandoned in 2011 when a report by the productivity commission found the $495m generated by the tax would be offset by the $1.2bn it would cost to implement.
Consumer advocacy group CHOICE expressed its support for the principle of
tax-neutrality, but expressed concerns that the "bill would not lead to
fair or simple outcomes".
"[We are] extremely concerned that the proposed change to the GST LVT will
lead to additional costs to Australian consumers, on top of the GST
collected. It is also likely that the cost of administering the scheme will
be greater than revenue raised," says Erin Turner, acting director of
content, campaigns and communications.
She says there's still a lot about the new tax that is not known.
"The Treasury has not released any modelling on the impact of the proposed
LVT changes. They have only provided the revenue expected to be raised
across the first three years with no detail on collection
costs or the impact of the measures on businesses, consumers or the wider