Global logistics player DHL has weighed into the GST in online overseas sales debate, warning the move to adjust the current $1000 GST-free threshold “unwise”.
Speaking at the Federal Government’s Online Retail Forum on Friday, DHL customs and regulatory affairs manager, Oceania, Ben Somerville, said the company believed the current $1000 GST-free threshold was the right choice.
“The Board of Taxation examined this issue recently… and they concurred with our position stating ‘the current low value threshold is set an appropriate level that ensures postal and non-postal items are treated the same and strikes an appropriate and right balance between revenue collection and administrative efficiency’,” he said.
“That is, the cost it takes to collect low amounts of duty and GST often exceeds what that duty and GST is.”
According to Somerville, the reaction from big retailers late last year suggested the sector, and government, needed to take a long-term view of the online GST issue.
“We need to look at this online retail phenomenon in a structured way,” he said. “Contrary to some of the commentary pushed through the media last year, this is a technology issue and not a tax one.
“We would argue that changing existing arrangements because of the short-term fluctuations in the dollar would be unwise as when the dollar returns to its long-run average value — which economists agree it must — this will create some issues.”
Also speaking at the forum, Australia Post general manager of postal product and business development, Mark Crawford, steered clear of the online GST debate but did note the importance of dollar fluctuations to retailers.
“The Australian consumer generally wants to support the Australian economy… but at what cost and convenience to do so?” he said. “A falling Australian dollar will leave Australia with a consumer who has grown accustomed to buying online but with less opportunity to access overseas items.
“The question for retailers domestically is ‘where will you be positioned when this happens?’”
While email may have decimated much of Australia Post’s business, Crawford said e-commerce was making a dramatic contribution to the company’s bottom line.
“E-commerce is a fundamental component of our future-ready business renewal program,” he said. “The growth online is so exceptional that over 70 per cent of our business is grown through e-commerce in one form or another.”
As reported by Computerworld Australia, communications minister, Senator Stephen Conroy, said that while the digital economy underpinned Australia’s future, the online retail sector continued to lag behind international competitors with some 58.5 per cent of small businesses yet to deploy an online presence and some 72.9 per cent yet to offer online transactions.
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