Shopping Tax Change Would Mean Shoppers Paid More

It’s the latest conundrum facing the federal government.

Closing a loophole that allows shoppers to spend $999.99 on overseas goods without having to cough up the 10 per cent GST at home might be unfair to Australian retailers who do have to add on the tax to their goods, but it means that consumers get a slightly cheaper price.

News that the federal government will examin the issue as part of its upcoming White Paper on taxation is news to the Australian Retailers Association, which has lobbied hard to have the loophole closed in recent years.

Executive Director Russell Zimmerman admits that if the government falls on the side of Australian retailers it will mean consumers will be facing higher prices. But he thinks shoppers will understand.

“Obviously, consumers are going to end up playing a little more,” he said.

“But I think most consumers in Australia realise there is a need to support Australian industry and support Australian job growth and that is what this is about.”

Mr Zimmerman said Australia’s $265 billion retail industry, both online and bricks and mortar, faced a significant disadvantage while competing with its off-shore counterparts for the Australian dollar.

“If you are a retailer and you are working in Australia – so you are operating within and selling your product in Australia – you have to submit a goods and services tax to the government,” he said.

“But if you move yourself off shore and you sell from off-shore into Australia, then you don’t have to pay that tax.

“If you are based in Australia, you are employing Australians, you are paying tax, you are supporting Australian workers.

“When you are sending things from overseas, as an off-shore retailer, you are not supporting jobs for Australians, you are not paying tax within Australia.”

He estimated that 30,000 jobs had been lost from the Australian retail industry, which employs about 1.2 million people across the nation, and the association would once again make its views known to the government in a submission to its White Paper.

But there was some good news for local retailers. Shoppers hit the Boxing Day sales harder than the year before, spending about $73 million more than in 2013 to bring the 2014 total to more than $2 billion.

http://www.brisbanetimes.com.au/queensland/shopping-tax-change-would-mean-shoppers-paid-more-20141228-12eopq.html

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www.brisbanetimes.com.au

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