With Sinclair Davidson
Executive Summary: The elimination of the low-value threshold for the Goods and Services Tax constitutes a new tax on inbound internet trade – that is, it will function as a tariff imposed on Australian consumers.
- The tax will raise very little revenue and will be expensive and complex to administer.
- The tax deviates substantially from the existing GST design.
- The tax is less a tax on consumption but on the reputation of foreign internet businesses.
- The tax is inconsistent with the government’s commitment to deregulation, the promotion of international trade, and its innovation agenda.
- The tax rejects principles that the Howard government established in terms of deregulation and the promotion of international trade.
- The tax will do nothing to address the issue of high retail prices in Australia.
- While masqueraded as a tax integrity measure, this tax is clearly intended to operate as a form of protectionism.
- The tax will reduce competitive pressure within the domestic Australian economy, and (as a consequence) expose Australian consumers to government sanctioned higher retail prices.
- The tax will lead to Australian consumers substituting away from large reputable electronic distribution platforms to more disreputable platforms leading to higher rates of internet fraud and possibility criminality. Product safety and consumer protection rights are likely to be compromised.
- The tax has few safeguards to ensure compliance and remittance of revenue to the Australian government.
- The tax contributes to increased levels of regime uncertainty within the Australian policy environment.
Parliament should reject the Treasury Laws Amendment (GST Low Value Goods) Bill 2017.