Australian Retailers Urge Action On Under-Valued Imports

Mary Swire, Tax-News.com, Hong Kong

25 November 2010

Retailers in Australia are urging the Customs Service to take immediate compliance action to stem the surging importation of under-valued retail imports. The National Retail Association (NRA) said that retailers were struggling to compete with cheap online imports, which were being declared as worth less than AUD1,000 to avoid attracting Goods and Services Tax (GST).

NRA Executive Director Gary Black said that retailers were reporting widespread instances of online overseas retailers taking further advantage of the high Australian dollar by under-valuing their products in import declarations.

“Struggling retailers are urging Customs to step up compliance efforts to help prevent under-valued products swamping local markets. By under-valuing products in import declarations, overseas online retailers are further under-cutting local retailers already struggling because of subdued trading conditions. Increased compliance checks by Customs to crack down on this fraudulent practice would represent an immediate and practical first step to help local retailers,” he said.

The National Retail Association has spent recent days in Canberra lobbying the government and opposition to help retailers being unfairly under-cut. “The NRA has made clear to the Government that this issue looms as one of the biggest threats that bricks and mortar Australian retailers have faced for decades. Currently imported goods under AUD1,000 in value do not attract GST, duty or other customs fees and charges. The effect of this is that Australian retailers who import shipments are paying up to 30% more than a consumer buying online,” he said.

He also suggested that in addition to Customs launching a compliance crackdown, the government should eliminate the AUD1,000 threshold. “The AUD1,000 tax free threshold is unique to Australia, with countries such as the United States, United Kingdom, Canada and New Zealand all imposing varying amounts of tax, duties and charges. Customs could impose an additional charge on small packages, such as AUD5, to fund the cost of increased administration and enforcement,” he said.

Online retailers, such as eBay Australia and New Zealand, have responded by suggesting that traditional retailers should go online themselves.

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