GST Report Targets Suppliers
In a further development in the GST debate, Treasurer Wayne Swan has released a report that recommends international suppliers should be monitored more closely when it comes to tax.
An inquiry has been formed to review GST distribution in reaction to complaints that the threshold for the tax, currently set at $1000, is too high.
The government was handed a preliminary report by the inquiry on Tuesday last week that recommended introducing a system that targets international suppliers by forcing them to register for GST before supplying products to Australia.
“Information provided by debit and credit card issuers or intermediaries would be an extremely convincing voluntary compliance tool and it is considered that large companies would be more likely to comply than not,” the report said.
The proposed solution would involve GST registration, lodgement and compliance processes to introduce “certainty and clarity” to the system, which has clearly been found to be lacking currently.
The online retail giant Amazon is highlighted as an example in the report as a business that already pays taxes across several regions.
“Amazon complies with many VAT and US taxation requirements, so why does it comply with some indirect tax lays and not others?” asked the report.
“The answer, quite simply, is that those countries’ tax laws say it has to.”
Last year, the Productivity Commission found that lowering the get threshold was a valid solution, however the cost of collecting a low-value threshold GST exceeds the amount of tax that would be raised.
While the inquiry is due to issue its final report later in the year, we want to know what you think. Are international suppliers dodging GST, or is this a charge that should be put back on the consumer?