Australian Retailers Waiting for Answers From Customs

by Mary Swire, Tax-News.com, Hong Kong

07 April 2011

The Australian Fair Imports Alliance has called on the country’s customs management to “come clean” and provide crucial importation data to industry, business and the Productivity Commission (PC) inquiry into the future of retail.

The Fair Imports Alliance spokesperson Brad Kitschke said that the industry was still waiting for answers to questions about the low value importation threshold crucial to the PC retail inquiry submitted to the Customs and Border Protection Service on March 7.

“These questions were then followed up at a Customs forum for industry held on March 25 in Melbourne, but went yet again, unanswered,” Kitschke said.

The Australian government announced in December the inquiry into the future of Australian retail by the Productivity Commission, and a compliance campaign to crack down on people or businesses abusing the AUD1,000 low-value threshold.

The Assistant Treasurer, Bill Shorten, released the Terms of Reference for the inquiry, which will report to the government and industry later this year on the implications of globalization on the Australian retail sector.

The Commission will consider the broader issues posed by an increase in online purchasing by Australian consumers and the role online purchasing plays in providing consumers with greater choice, access and convenience. The sustainability and appropriateness of the current indirect tax arrangements in this environment will also be considered.

The compliance campaign was launched to ensure GST and customs duty concession for imports with a value of AUD1,000 or less are not being abused or exploited. The campaign started at the beginning of 2011.

“It's important people follow the rules and not try to rort the system. Customs will work closely with the retail sector to identify particular areas of risk for non-compliance,” Minister for Home Affairs Brendan O'Connor said.

The Fair Imports Alliance has written to Brendan O’Connor and lodged Freedom of Information requests in an attempt to gain access to data held by government agencies.

“We have hit a brick wall and we need the Minister to step in. We have been told by Customs it provided some advice to the Board of Taxation when reviewing the low value importation threshold in 2010, but that information isn’t being provided to industry. We are told a lower rate of the threshold is not ‘administratively or economically feasible’ but we have seen no modeling, no data, no analysis, no reports. On what basis is this claim made if the data doesn’t exist? This information is crucial to industry being able to properly contribute to the PC inquiry process. Fair Imports Alliance is concerned the PC may not be able to make informed recommendations”.

The Productivity Commission has just released an issues paper to assist individuals and organizations to prepare submissions to the inquiry. It contains and outlines the scope of the inquiry, the Commission’s procedures, matters about which the Commission is seeking comment and information, and how to make a submission. The Commission wishes to receive information and comment on issues which participants consider relevant to the inquiry’s terms of reference.

The due date for submissions is May 20, the draft report will be published in early August and the final report will be presented to Government by November.

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