According to the Australian Retailers Association (ARA), retailers have lost $1.73 billion in revenue due to the Low Value Imports Threshold (LVIT).
ARA executive director, Russell Zimmerman, is urging the Federal Government and state premiers to lower the threshold immediately to help local retailers.
“The sudden collapse of bicycle retailer BSC Bikes could have been prevented given a more equitable trading environment,” he says. “Action needs to be taken to reduce a threshold which not only poses an inherent competitive disadvantage to Australian retailers but is also a hidden GST trapdoor for states.
“The reality is all Australian retailers – whether they’re operating online stores, physical stores or both – are unable to compete on price or innovation with overseas retailers marketing products to Australian consumers.
“Retailers have suffered in recent state budget announcements which sacrifice business initiatives for the need to achieve long term surpluses. One reason for this sacrifice is declining growth in GST revenue, which would be rectified through the lowering of the LVIT.
“Research shows the majority of Australian consumers would rather buy Australian, even when shopping online. Australian retailers cannot respond to this consumer demand if they’re competing with overseas retailers who are able to dodge tax.
“The ARA welcomed the formation of the Retail Council of Australia as part of the government’s response to the Productivity Commission’s inquiry last year. We look forward to continuing work with both the council and the LVIT Government Taskforce to achieve much needed GST reform.
“The ARA is also working with other industry associations to work towards removing the competitive disadvantage currently imposed by the LVIT threshold, which needs to be removed in the confines of tax neutrality,” Zimmerman says.
This article first appeared on www.ttmag.com.au