The retail industry is ramping up its campaign to have the Federal Government abolish the GST-free low value threshold, with the National Retailers Association brandishing a new report that says the states could be losing billions in potential revenue.
It is the second call for movement on the threshold in just a few days, after Myer chief executive Bernie Brookes also backed a GST-free low value threshold yesterday after delivering lacklustre annual results.
This comes after both the Federal Government and the Opposition delivered a lukewarm response to a recent report from the Low Value Threshold Taskforce, which found reducing the threshold could produce revenue benefits if the postal system is overhauled.
Neither the Gillard government nor the Coalition gave a clear indication they would drop the threshold, much to the disappointment of the retail industry.
The National Retailers Association has now said it will be pressuring the government to do more.
NRA director Gary Black said a new report commissioned by the association and authored by Ernst and Young has found that state and territory governments could lose over $2.4 billion in the next three years if the threshold isn’t lowered.
“We’ve discussed the consequences of not lowering the threshold at great length. This is a matter of escalating concern because GST funding levels are in decline anyway, and that will continue as consumers shift from domestic spending to foreign spending.”
The release of the report comes after a separate report released by the NRA earlier this year suggested over 100,000 jobs could be lost if the threshold remains the same.
Black says the most cost-effective solution would be for the government to legislate to make offshore companies responsible for collecting GST.
He also says the importance of changing the GST threshold changes from sector to sector, but says many businesses believe “changing the threshold is the single most important reform that needs to be implemented”.