The federal government is considering a review of the tax-free threshold for online sales that could see goods and services tax (GST) applied to more web purchases.
The assistant treasurer, Josh Frydenberg, told 2GB radio that reviewing the $1,000 tax-free threshold that applies to online retailers was something the government was examining.
He said local retailers were at a disadvantage because of the current rules for online purchases.
“If you can go online and buy the same product from overseas without that GST attached then you are hurting local suppliers and local jobs,” he said. “It’s about ensuring this is a level playing field,” he said.
“This does hurt local jobs and we have to understand that the retail sector is the largest in this country.”
The Australian Retailers Association welcomed the calls, and its chief executive, Russell Zimmerman, said the tax-exempt laws “has done nothing but damage our retail sector”.
Frydenberg said one of the issues with lowering the threshold in the past had been the compliance costs associated with policing possible breaches. But he said technology for monitoring retailers had advanced, and that many other countries have much lower thresholds than Australia.
“One of the issues is the amount of compliance costs that are involved with tracing where these goods are coming from and making sure they pay the relevant amount of tax. But when you look around the world most comparable jurisdictions … have lower thresholds than Australia,” he said.
The states and territories will need to opt in to any changes to the GST that the federal government puts forward before changes can be made.
