Customs officers are cracking down on businesses that attempt to avoid paying GST on imports worth over $1000; a move which has received mixed responses from industry groups.
Home Affairs Minister Brendan O’Connor revealed Customs has launched a 14-week investigation to identify anyone breaking the law, with a special focus on items such as clothing, cosmetics and musical instruments.
O’Connor said Customs officers will have the power to seize goods and, if the goods aren’t allowed in, they will be destroyed.
While goods currently escape GST and other taxes if they are worth less than $1000, consumers are required to fill out declaration forms and pay duty on more expensive items.
Traditional retailers have argued they cannot compete with online retailers and are demanding the government extend taxes on goods worth less than $1000.
A Productivity Commission inquiry into the economic structure of the retail industry and the impact of online shopping will commence soon, with the final report to the government by November.
Brad Kitschke, a spokesperson for the Fair Imports Alliance, says he is concerned by the lack of industry consultation in regard to the crackdown.
“We have expressed our concerns to Customs and we still haven’t received a response… We believe we have been kept in the dark about this issue,” Kitschke says.
“Customs has a lot to learn about industry consultation and needs to engage with industry in a much more proactive fashion.”
Kitschke says the crackdown should not be targeted at individuals as the FIA is more concerned about the extent of illicit trade in the black market economy.
“There should be a greater level of cooperation between the Federal Police and the Australian Taxation Office to ensure those people are caught out and this practice ceases to occur,” he says.
“I don’t believe it will deter people from online retail. With regard to the [$1000 tax] threshold, there needs to be an appropriate way of enforcing it – if we’re going to have rules, they need to be followed.”
Peter Strong, executive director of the Council of Small Business of Australia, believes the investigation is a “fine thing” but says it should have happened long ago.
“I don’t care if they’re a business or a consumer – they should be paying GST,” he says.