The Australian Retailers Association (ARA) is set to fight for tougher taxes at a Senate Economics Legislation hearing today.
The ARA will argue in support of the Government in closing the Low Value Threshold (LVT) loophole for the purchase of offshore tangible goods under $1000.
This will see the current GST exemption for goods purchased under the value of $1,000 cease in July this year.
The move comes as some international retailers threaten to break rank over the issue.
Online marketplaces such as eBay would be required to to collect the tax, with the etailer arguing the rule may force it to prevent locals from buying from overseas sellers.
In its submission to the Senate Committee, eBay rallied against the changes.
“Regrettably, the government’s legislation may force eBay to prevent Australians from buying from foreign sellers.
“It is open to abuse by foreign companies, it exposes Australians to the risk of double taxation, it will reduce price competition and choice for all Australians who shop online, and it will drive online trade away from trusted, cooperating online marketplaces to the dark parts of internet."
However, ARA executive director Russell Zimmerman said the law will provide a level playing field for Australian retailers.
“This is a tax equity issue and internationally-based retailers should pay their fair share of tax,” Zimmerman said.
“Retailers conducting business in Australia should pay their tax just like Australian retailers currently do.”
The ARA has said this GST has been a long time coming, expressing thanks to then Assistant Treasure Bill Shorten for his commencement of the process in 2011.
“Multiple jurisdictions are already introducing similar laws as this is a global tax issue,” Zimmerman said.
“This new legislation will create a fairer tax system for Australian retailers by creating a level playing field against international competitors.”
Zimmerman said the proposed system is the best model at this point.
“Freight companies and credit card businesses should not be responsible for collecting this tax, the onus should fall on internationally-based businesses to collect it."