Tax fairness - Low value threshold on goods purchased from overseas retailers
Australia has one of the most generous low value thresholds for value-added tax and duty exemptions. The current exemption from GST and duties for low value imported goods and services purchased by Australian households in $1000.
When this exemption was put in place, over a decade ago, online overseas shopping was significantly smaller than it is now. Consequently the loss of GST revenue was minimal.
The strong growth in online retail shopping means it is no longer appropriate to maintain the low value threshold (LVT) at $1000.
ANRA has proposed a GST collection system which lowers the LVT to $20. Ernst & Young estimates that under this system the net gain to Australia would be an accumulated gain of $6.5 billion in GST revenue between 2014/15 and 2019/20.
ANRA's advocacy work has been well received by State Premiers and Treasurers and the Federal Government who see value in the proposal.
A series of reports commissioned by ANRA estimates that Australian States and Territories have forgone an estimate $806 million in GST on imported goods along in 2013/14. This figures would be higher again if imported services were also considered.
ANRA recognises that these GST funds, if collected, could be spent on a range of public infrastructure and services by the States and Territories. This is spending that is crucial to important areas such as law and order, education and health.