In an incident that is sure to further heighten scrutiny on imported products from international online retailers, it has been revealed that businesses will falsify invoices to help consumers beat the GST.
There is now evidence that offshore online retailers are offering to help Australian consumers to avoid GST and import duties through the creation of fake invoices, which display a lower than actual sale price for the goods purchased.
The report comes from The Australian, which engaged a customer service representative from Hong Kong electronics retailer eGlobal, who was willing to falsify an invoice for a $1,900 camera – potentially saving the buyer around $300 in tax and duties.
According to The Australian, the company offered to “prepare an adjusted invoice upon customer’s request” to generate an invoice showing that the items purchase cost less than the $1,000 tax free limit.
“Australian customs may charge you duties on the shipment with invoice over $1,000,” the eGlobal representative apparently wrote. “However we can prepare an adjusted invoice upon customer’s request. Our invoice team can adjust the invoice to say around $900 so can pass the Customs.”
The incident confirms growing concerns from many local retailers that international businesses have an unfair advantage over local businesses in their ability to avoid Australian laws and tax. Groups like the Australian Retailers Association (ARA) and the National Retail Association (NRA) continue to push the government to lower the tax threshold and introduce methods of accurately collecting tax.
However, this case is perhaps more worrying, as it demonstrates the ability that international businesses have to help Australian consumers avoid taxes. Whether this is a product of callous disregard or simply ignorance, it provides fodder for an argument against lowering the GST threshold.
Without a thorough means to check prices, invoices and taxes on all overseas purchases, lowering the tax threshold would only prompt consumers and international businesses to become better at ‘dodging’. Meanwhile, trying to implement changes to our current system could easily cost more money than would be saved in the short term.
How would you solve the problem of policing invoice fraud and GST evasion? Can consumers be expected to accept a portion of the blame in these situations?