The Australian Retailers Association (ARA) has urged swift action following the Council of Australian Governments (COAG) in principle agreement to broaden the GST to include international online purchases under $1,000.

While the ARA maintains the move is a step in the right direction, it maintains that further progress beyond this agreement must be made quickly, to ensure that Australian retailers are no longer disadvantaged by this loophole.

“The only acceptable outcome of a broadening of the GST to include overseas online transactions under the current threshold of $1,000 is to eliminate the threshold altogether,” ARA, executive director Russell Zimmerman explained.

Collect at POS

“The ARA considers the simplest method of collecting this sales tax is at the point of sale. Many international retailers already have mechanisms in place to be able to accept GST at the point of purchase, and we don’t envision that this would involve extra effort on their part, and will not incur any additional costs by the Government.

“While the ARA welcomes this long overdue extension of the GST, it is critical that the process does not stall. The agreement by State Premiers is a good start point, however, it must also be backed up by State Treasurers at their meeting next month,” Zimmerman said.

The decision on the Low Value Threshold was one of several made at a COAG meeting this week, which focused largely on GST.

“Australian retailers have suffered too long with the uneven playing field the LVT has created, giving international retail businesses the upper hand in our own market, and it is critical that an end be put to this as soon as possible, with the complete elimination of the threshold,” he said.