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He said he was confident international pressure on
multinational companies to pay tax would encourage
companies to sign up.
Companies such as Amazon were “quite willing to do
it’’, he said. Some Australian companies, especially
those with “bricks and mortar” stores, have
complained that overseas competitors have an unfair
advantage by not charging GST and it puts local jobs
at risk.
Past research had shown the cost of collecting the
tax would be more than the revenue gained.
Governments are now confident revenue from the
change in the threshold — which will be lowered to
zero — would be greater than the costs of
administering it.
Modelling from the Retail Council undertaken by EY
shows extending the GST to all imported consumer
goods would result in a net increase in GST
collections of more than $1bn in 2015-16 and $1.7bn
in 2020-21 after collection costs of just $37
million.
The federal government will also model potential tax
changes, including to the GST, ahead of another
meeting of the nation’s treasurers next month or in
October on tax reform. Discussions yesterday also
included a proposal led by Queensland and backed by
Victoria to raise the Medicare levy to fund growing
hospital costs but Mr Hockey again indicated he did
not support it.
He was also cool on changes to stamp duty amid
concerns that lowering stamp duty in the current
hothouse atmosphere in areas of the Sydney and
Melbourne property markets would fuel further
speculative behaviour, but he said transactional
taxes such as stamp duties remained “inefficient
taxes’’.
Retail Council chief executive Anna McPhee said
agreement by the treasurers to ensure all consumer
purchases were treated the same under the GST system
was an important step forward in ensuring a fair
and efficient tax system.
“This is sensible reform that delivers greater
consistency in our consumption tax system and will
mean similar goods and services consumed
domestically are taxed equally,” she said.
KPMG indirect tax partner Deborah Jenkins said the
GST move would ultimately bring Australia more in
line with the rest of the world. “GST is frequently
used as a reason for the price differences between
locally sold and imported goods, but the
differential is often far greater than 10 per
cent,’’ she said.
“Removing the LVT will hopefully take that issue
from the equation and allow a discussion about how
we can improve efficiency in the economy, and
promote the real differences about buying locally,
like knowledge, customer service or customer
experience.”
Chris Berg, a senior fellow at the Institute of
Public Affairs, said the decision to extend the GST
to online purchases below $1000 by 2017 “is a new
tax that will hurt Australian consumers’’.
Opposition Treasury spokesman Chris Bowen blasted
the failure to reach agreement on removing the GST
from women’s sanitary products.
He said Mr Hockey was a “weak treasurer getting
weaker by the day’’.
Mr Bowen had urged Mr Hockey to link the issue to
the extra revenue on the table from the lowering of
the GST threshold on imported goods.
“It’s a very disappointing outcome for millions of
Australian women — and they have one person to thank
for it: Joe Hockey,’’ Mr Bowen said.
Source:
The Australian, dated 22/08/2015. |