Government criticised for lumbering ATO with vague plan to tax low-value goods, warning of ‘major disruptions’ for businesses and families

This article is more than 3 years old

This article is more than 3 years old

Labor is calling on the Turnbull government to delay by 12 months its plan to impose a goods and services tax on low-value imports.



It says the Coalition needs to subject its plan to a regulation impact statement, after revelations from Treasury officials it had failed to do so.

It has criticised the government for lumbering the Australian Taxation Office with a vague plan that appears unenforceable, warning it will likely cause “major disruptions” for businesses and families.



A Senate inquiry into the government’s GST plan was held on Friday. It was the first public hearing of the government’s plan to impose a 10% GST on all online goods imported to Australia, despite being announced by the former treasurer Joe Hockey in August 2015.

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Senators heard from the internet giants Amazon, eBay and Alibaba, from consumer advocates Choice, retailers and tax experts, and officials from Treasury and the ATO.

Treasury officials admitted the government’s plan was in breach of its own best-practice requirements because it had not been subjected to a regulatory impact statement.

At the moment, imports of goods worth less than $1,000 are GST-free but the government wants to abolish the concession.

Under the plan, the Coalition wants to use a so-called “vendor model” to force companies such as Amazon and eBay to collect the GST on online goods imported to Australia.

But Marisa Purvis-Smith, the head of Treasury’s individuals and indirect tax division, told senators the government had chosen the “vendor model” without subjecting it to a regulation impact statement.

Labor says the revelation means the government should not try to implement its changes on 1 July as planned. It has called on the government to delay the start date to 1 July 2018, and to subject the plan to a regulation impact statement.

It also wants the government to seriously consider alternative models of GST collection, given the concerns raised about the vendor model. “Labor has supported the removal of GST on low-value imports with a feasible model, and remains supportive in principle,” the shadow treasurer, Chris Bowen, said on Friday. “But today’s hearing found the Turnbull government has botched its implementation.

“The ATO, lumbered with a vague plan by the government, were left to explain that jurisdictions like the USA and China will not enforce the measure on their behalf.

“[It] clearly shows that Scott Morrison has failed to properly consult with stakeholders and develop a workable model for taxing low-value imports.”

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On Friday ATO officials said they had compiled a list of 3,000 overseas companies that would need to register with Australia’s government to collect GST on the government’s behalf.

They said the majority of low-value imports came from the UK (38%), North America (27%), China (8%) and Hong Kong (8%).

But they said the US and Chinese governments would be under no obligation to force companies operating within their borders to comply with the Australian government’s wishes.

Treasury officials declined to answer questions about whether alternative start dates had been modelled.

The Conference of Asia Pacific Express Carriers and the Freight and Trade Alliance called for a 12-month delay.

If Australia introduces the vendor registration model in July it will be the first country in the world to do so. Switzerland has legislated a vendor model but it will not come into effect until the beginning of 2018.