Scrapping LVT moves one step closer

Australian sporting and active lifestyle goods brands and retailers are very pleased to see that today Treasurer Scott Morrison introduced the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 into Parliament.

This Bill will scrap the Low Value Threshold. Overseas online retailers will now have to register for GST with the Australian Tax Office, charge Australian consumers GST at the point-of-purchase, and remit the GST back to the ATO – the same way every Aussie retailer does.

From 1 July 2017, when the new laws will come into effect, overseas competitors will no longer have an unfair competitive advantage over Australian retailers.

Executive Director of the Australian Sporting Goods Association, Shannon Walker, said “ASGA has been at the forefront of working with the Federal and state governments to reduce the low value threshold and provide a level playing field for Australian retailers.”

As noted by the Treasurer in his speech in Parliament today:

“Importantly, this Bill also tackles the growing risk that the current arrangements pose to the integrity of the GST base. With the continued growth and normalisation of cross border shopping, we cannot afford to simply ignore the impact of these outdated arrangements on the tax system.

As a result of the reforms being introduced today, low value goods imported by consumers will face the same tax regime as goods that are sourced domestically. This is how a fair and modern tax system should work and I am proud that Australia is taking the lead in this respect…

We now live in a world where online cross-border shopping is a normal and often daily activity for many Australians. This reform to Australia’s GST is a significant world first but it is consistent with the direction of international tax policy in this area.”

However, we do have some concerns, the main one being how the Government will enforce the legislation on overseas retailers, including potential penalties for non-compliance. We’d also like to know the process by which the ATO will target specific overseas retailers and what opportunity the sporting goods sector will have to identify overseas competitors to be targeted.

“ASGA will continue to work with all sides of politics to ensure this important legislation is passed in a timely manner. We will also consult with Treasury about how the legislation will be implemented and enforced,” Mr Walker said.

The Australian Sporting Goods Association was formed in 1981 as the industry association representing a broad spectrum of sporting and active lifestyle goods industry participants, including manufacturers, importers, wholesalers and retailers.

ASGA is a leading industry voice on issues impacting the health, trade, regulation and taxation of the sporting and active lifestyle industries. ASGA aims to foster market growth, provide services and advocate for increased participation in sport and physical activity.

ENDS