People who buy items under $1000 online from overseas could soon pay GST on them, but while some retailers and lobby groups may rejoice, QUT retail expert Dr Gary Mortimer said collection could cost up to $2 billion a year.
"People don't choose to shop online internationally to avoid paying GST. They shop online for convenience, to access products not locally available, or to take advantage of very low retail prices," Dr Mortimer, from QUT's School of Advertising, Marketing and Public Relations, said.
"Some retailers and lobby groups have called for the low value threshold to be removed or reduced, suggesting they want a level playing field for Australian retailers, and with imported electronic goods that will incur GST from 2017.
"The impact of online shopping on traditional bricks and mortar retail has to some extent been exaggerated.
"For the year to May, shoppers spent about $17 billion online, which represents only about 7 per cent of bricks and mortar sales.
"This is a numbers game. Granted, extra tax revenue will be generated by the removal or reduction of the LVT, however, we need to consider the costs of collection."
Dr Mortimer said the Productivity Commission in 2011 had estimated around 58 million parcels under $1000 arrived in Australia each year and that the lost GST revenue from these would be approximately $600 million.
"NAB's economic modelling of more than two million online shoppers predicted the lost GST revenue to be around $360 million, although, the Australian National Retailers Association estimated $800 million.
"Whatever the numbers are, I think we need to consider the costs of processing those parcels, collecting revenues and the extra administrative tasks customs and postage services would undertake.
"These costs have been estimated by the Productivity Commission to be between $1.8 and $2 billion per year.
"On top of that we have a falling Aussie dollar so that it costs more to buy overseas goods. It's great news for Australian retailers, hotels, resorts and restaurants.
"As overseas holidays, accommodation and other travel expenses are more expensive now more people will stay and home and shop locally or from domestic online retailers.
"Naturally with an influx domestic and overseas tourists attracted by a better exchange rates our cafes, restaurants and local retailers will win out."
Media contact: Niki Widdowson, QUT media, 07 3138 2999 or n.widdowson@qut.edu.au.
