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Proposed Australian Customs Changes

EmilliaEmillia6 months agoMisc
I don't know if this is still a going concern or not, but during March and April of this year there was a lot in our local media about some hilarious? misguided? stupid? plans the Australian Government is trying to implement re collecting GST tax on imports worth less than A $1000, that are exempt under our current system.

The problem with collecting taxes on these goods has always been that the cost of implementing the system and collecting the tax would cost more than the amount of money generated. Australia Post, our main mail carrier, has also pretty much said it would be impossible for them to do it because it's not financially feasible for them to absorb those kinds of costs and that it would become impossible to process international packages in any kind of reasonable time frame. I mean, of course they don't wanna do it so I don't blame them for claiming it's impossible, but realistically, it would be very difficult, and we'd probably end up with what many other countries have, where there's also a fee to pay for processing the parcels on top of the actual tax to be paid on goods. And it takes longer to get parcels because of processing and inspection.

So the Australian government came up with this bright idea to require foreign online businesses who make more than A $75,000 a year to collect GST on goods at point of sale when an Australian resident buys something from their site, and then send it to the Australian Taxation Office because, um, they're nice? And foreign businesses are clearly going to jump at the chance to develop and then pay for the implementation of a foreign country's tax collection system, hahayeahright.

Not to mention the fact that this requires foreign companies to cooperate with the Australian government and release their sales data so the Australian government knows whether or not they have to set up this ridiculous GST collection, and then send the money collected (all of it!) to Australia, even though Australia has no way of auditing a foreign business or knowing how much they've made in GST collection or whether or not they've remitted the full amount of monies collected to the Australian Taxation Office.

So Amazon and Ebay are the two targets the ATO has in its sights first off, and they've both threatened to block sales to Australia rather than go through with this bizarre and unworkable system. Plus Ebay has rightly pointed out that they're a marketplace, not a vendor, so they would somehow have to magically know whether or not the seller who the Australian bought the goods from was earning more than A $75,000 per year to even know whether or not the GST collection requirement applied.

Also GST is not payable on used goods, so this theoretical system would have to have the ability to distinguish between the category of new and used. And we already have a procedure in place for collecting GST on goods of more than $A 1000 at point of entry into the country via the more normal system of sending a bill to the buyer and then waiting for them to pay it before releasing the goods. I've not seen anything as to whether this system would remain unchanged, which would mean that stores who (theoretically) went along with this ridiculous requirement, might have to set up a system that charged GST on goods under A $1000 but not over because tax on those is collected via another means. Which makes the entire thing even more awkwardly unworkable.

The thinking behind trying to implement this tax is that Australian retailers are unfairly disadvantaged because they have to charge GST and Amazon etc. don't, but even if an extra 10% did get charged on everything I bought from, say, Amazon, those prices would still be far below Australian retail prices for many goods, despite the current weakness of the Australian dollar. Plus there's the fact that many Australians turn to overseas online retailers because a lot of things we want to buy simply aren't available in Australia.

And, yes, I do understand that Australian retailers have high overheads for various reasons that drive our prices up, but the other thing that drives customers away is that a lot of retailers here are just pretty incompetent, particularly when it comes to online shopping. Processing times can be very slow, like several weeks in some cases, customer support is minimal or non existent if you have a problem with your order, returns are not made easy and hassle free. The crazy things I've been told! I’ve actually had two different businesses at different times blame really slow weeks-long processing times on the fact that it supposedly took weeks for my electronic payments to clear into their accounts. Like, do they really think I don’t know they’re lying through their teeth? It does not take 3-4 weeks for an electronic payment to process, and if it is taking that long there is something seriously wrong with their system.

Specifically for our hobby, it would be hilarious to watch some Australian government official try to convince, say, AmiAmi, to go along with this GST thing. It's just not going to happen. I mean, I seriously doubt that at this stage, the Australian government is even thinking about niche collecting sites, I think this is far more targeted towards mainstream Western retailers, but nevertheless, the whole thing is still a bit of a worry. Down the line I don’t want to end up with customs hassles on top of everything else.

As regards Amazon and Ebay, even if they refused to comply and blocked sales to Australia rather than deal with hassle of this GST nonsense, it would simply lead to an increase in the number of Australian shoppers buying from those sites via US forwarders and proxy services. It wouldn't stop people getting the goods they want. It's very unlikely to drive consumers back into the arms of Australian retailers who don't even stock the products they want, or do so at a price so high as to be unaffordable. Also I wonder about 3rd party sellers on Amazon. How would they be treated? I’ve bought from Japanese sellers on Amazon (US) and it would be annoying to have that avenue blocked.

As I said, there was a lot of noise about all of this in March and April of this year (I believe the changes were initially proposed a couple of years ago), but I’m having trouble finding anything more recent to see how all of this is progressing (if indeed it is). Theoretically these changes are supposed to be coming into effect on 1 July 2017 (the beginning of our new tax year), but the last I heard the whole thing was still mired in controversy and apparently nowhere near ready to start rolling out. I really hope that the whole thing has been shelved and will just disappear.

Edit: So after I did some digging, I found out that it appears the Senate did pass this nutty proposal, but with a lot of criticism, and with delayed implementation until July 2018. Hopefully enough will happen in the next year that it will get scrapped.
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Comments29 comments

Selected Comments
20pt
I remember there was a cry about this last year or two as well (with our beloved Joe/Abbott in charge) and nothing came of it. Hopefully this will blow over as well.

I don't believe any overseas retailer will take this seriously not to mention release confidential data to our government AND pay them the GST due so the proposal is very idealistic in the first place.

If the government is after money the marriage market is pretty ludicrous and we're loosing money by excluding people. Just putting it out there...
6 months ago
Recent Comments
0pt
4catdoorman (6 months ago) #21653218Your country can sure be a PIA at times. Three years ago I had to unpack the contents of 5 Walthers Cornerstone series model railroad boxes (US-style 1/87 scale locomotive roundhouse with 4 stalls, machine shop building, smoke stack), flatten the model boxes, bag the tiny loose parts together and scrunch all of that so it would comply with the Oz girth rules into a kitbashed shipping carton rather than use a random Uline carton of sufficient size. It was either do that or pony up an add'l $600 USD to have a 4.5 cu ft carton flown over commercially rather than USPS. Jesus!
I'll bet some of the folks at Missouri Dpt of Revenue must have emigrated over there recently. Last April, 2016 I got a postcard from them (MoDoR) citing a precedent that occurred in St Louis, MO whereby I would have to start collecting a state sales tax on the shipping cost for items sold on the internet. I was able to get an exemption from collecting a sales tax as an ebay seller since nothing I resell is retail resale. Sooooo, how in the world am I going to charge 6% on shipping only if the ebay software is only geared for taxing per item or per item plus shipping?
Leave it to damn government to de-incentive doing anything to help yourself get ahead. As luck would have it the state internet tax failed last year and I didn't have to figure this out. Not gonna hold my breath though as all states over here are slowly reverting to an internet extortion fee.


Glad that you escaped the sales tax! Ha, yeah, we're a pain to deal with we have so many restrictions on stuff. It would have been a huge annoyance to re-pack all the models without damaging them.
6 months ago
0pt
Your country can sure be a PIA at times. Three years ago I had to unpack the contents of 5 Walthers Cornerstone series model railroad boxes (US-style 1/87 scale locomotive roundhouse with 4 stalls, machine shop building, smoke stack), flatten the model boxes, bag the tiny loose parts together and scrunch all of that so it would comply with the Oz girth rules into a kitbashed shipping carton rather than use a random Uline carton of sufficient size. It was either do that or pony up an add'l $600 USD to have a 4.5 cu ft carton flown over commercially rather than USPS. Jesus!

I'll bet some of the folks at Missouri Dpt of Revenue must have emigrated over there recently. Last April, 2016 I got a postcard from them (MoDoR) citing a precedent that occurred in St Louis, MO whereby I would have to start collecting a state sales tax on the shipping cost for items sold on the internet. I was able to get an exemption from collecting a sales tax as an ebay seller since nothing I resell is retail resale. Sooooo, how in the world am I going to charge 6% on shipping only if the ebay software is only geared for taxing per item or per item plus shipping?

Leave it to damn government to de-incentive doing anything to help yourself get ahead. As luck would have it the state internet tax failed last year and I didn't have to figure this out. Not gonna hold my breath though as all states over here are slowly reverting to an internet extortion fee.
6 months ago
0pt
longtailed_kat (6 months ago) #21650933Dear gods.
I started reading this thinking 'crud, you're going to get lumbered with a mirror of our shitty broken and corrupt* Import-VAT system we have in the UK', and then it managed to get worse o_o
I hope that somehow this falls. :s
* when compelled by law to publish a full economic breakdown of what makes their "processing fee" ends up costing so much (= 2 man-hours of standard pay), all they could produce was one side of A4 with 'We processed [very round number, i.e. 13,000] parcels which had VAT levied on them. Total expense of running VAT checks = (13,000 x the processing fee)'


Wow, that's terrible :/ Honestly, I'm still traumatised by my dealings with Parcelforce these many years later. They liked to capture my packages and not tell me they had them. Probably didn't help that I didn't understand the UK system very well. A couple of times I basically just had to go to the depot and ask if they had anything with my name on it, and when they'd pull my parcel out from the dark depths of their warehouse hell they'd always claim that they'd sent me letters telling me they had my parcel and there was x fee to pay, but I never got any such letters. And they acted so sour, like I was totally ruining their day by showing up and expecting them to do their job and give me my parcel.
6 months ago
0pt
Emillia (6 months ago) #21650362I bet AP will demand the govt heavily subsidize the cost and maybe set up a whole different branch to handle it.

LOL i think it's the other way around. More money and jobs for the Government in their perspective.

Want your parcel? Pay the $55 handling fee + GST or we'll sell it.
6 months ago
2pt
Dear gods.

I started reading this thinking 'crud, you're going to get lumbered with a mirror of our shitty broken and corrupt* Import-VAT system we have in the UK', and then it managed to get worse o_o

I hope that somehow this falls. :s


* when compelled by law to publish a full economic breakdown of what makes their "processing fee" ends up costing so much (= 2 man-hours of standard pay), all they could produce was one side of A4 with 'We processed [very round number, i.e. 13,000] parcels which had VAT levied on them. Total expense of running VAT checks = (13,000 x the processing fee)'
6 months ago
0pt
Shikaree (6 months ago) #21648640Even if they require international sellers to remit taxes, they still need customs inspections on all packages, along with a huge database keeping track of all incoming parcels, to actually enforce it. It's basically unenforceable except for very specific targeted cases like Amazon.
All true. Don't think the great minds in charge have figured any of that out yet.
6 months ago
0pt
Alsoar (6 months ago) #21647817I wish. They'll just do it like all the other countries and slap the handling fee onto the receiver instead.
I believe the current inspection/handling fee is $55. It's usually a shock and when customs request both GST and handling fee when importing over $1000.
Passing policies that benefits companies at the cost of tax payers is nothing new.

We might end up with something like that eventually, but I bet AP will demand the govt heavily subsidize the cost and maybe set up a whole different branch to handle it. Also keep in mind that the government is proposing a $0 threshold. Even Canada and the UK etc have a tax-free threshold even if it's very low. Extra staff, extra processing, say 10-20 dollar fee, slower delivery times, warehousing costs, security for the warehouse etc., need to inspect every single package and calculate costs, all so the govt can collect $1 on a $10 dollar item? If the Opposition has any sense they'd use it as an example of atrocious financial management from the party that likes to pretend they're oh-so-great with money.
6 months ago
0pt
Criscokid (6 months ago) #21647041GST = Government Supported Theft.
That is probably the official name in secret classified govt docs
6 months ago
0pt
Even if they require international sellers to remit taxes, they still need customs inspections on all packages, along with a huge database keeping track of all incoming parcels, to actually enforce it. It's basically unenforceable except for very specific targeted cases like Amazon.
6 months ago
0pt
Emillia (6 months ago) #21625027 True or not, AP has said if they had to do the inspections it would make them non-viable and they'd collapse and we'd have no postal delivery system at all. Also ppl here hate AP a lot already, I can't imagine how much more that would be the case if they started charging customs as well.
I mean, basically the government does want something similar to what the UK/Europe has, it's just that the point-of-entry people are telling them no, they're not going to do it because it will cost them too much / be impossible to implement in the current system. And the government has also previously not had support for this because it has been determined that collecting GST on low-value goods will cost more money than it will make, so they'll end up with a negative gain.


I wish. They'll just do it like all the other countries and slap the handling fee onto the receiver instead.

I believe the current inspection/handling fee is $55. It's usually a shock and when customs request both GST and handling fee when importing over $1000.

Passing policies that benefits companies at the cost of tax payers is nothing new.
6 months ago
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