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Australian online shoppers benefit from tax-free imports
Date: 2011/4/6 Click: 1324
Treasury on Saturday revealed that cyber-shoppers are costing Australian federal government 1. 314 million U.S. dollars a day by buying tax-free imports over the Internet.

The Productivity Commission issued a paper for its inquiry into the retail industry, saying that the lost revenue from the goods and services tax (GST) are forecast to grow 10 percent each year to hit 616.6 million U.S. dollars by 2013-14.

Australia's 1,010 U.S. dollars tax-free threshold for imported products has been the world's most generous outside Hong Kong ( China), where all imports are tax-free.

The commission paper revealed that Australia's tax-free threshold is 50 times higher than Canada's, three times higher than in New Zealand or Singapore, and eight times higher than Japan's.

"The number of parcels entering Australia under the low value importation threshold has risen in recent years and is likely to increase further as online shopping becomes more prevalent," the commission said, quoted by The Australian newspaper.

Overseas goods bought over the Internet, including fashion, perfumes and cosmetics, are exempt from the 10 percent GST as well as customs duty of 10 percent for clothing and five percent for footwear.

However, Australian retailers, which import goods in bulk to sell within Australia, have to pay both taxes, which they pass on to shoppers.

The commission refers to claims by some retailers that smaller retailers are "abusing" the tax-free threshold by buying goods valued at less than 1,000 U.S. dollars from overseas, and selling them to customers without paying GST or customs duties.

"There is nothing illegal about this practice, but some have alleged that the current regulations in this regard put larger local retailers at a competitive disadvantage," the report said.
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