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More work needed before changing threshold

Hon Nicky Wagner

Minister of Customs

30 June 2016


More work needed before changing threshold

Customs Minister Nicky Wagner says Customs is continuing to look into different ways of collecting tax effectively for low-value imports before proposing to lower the threshold at which it is collected.

“The volume of low value goods imports has grown by about 14 per cent per annum and is expected to double over the next five years. Customs does not currently collect GST and tariff duty if the total tax owed is under $60,” Ms Wagner says.

“The current $60 threshold benefits online buyers, but is unfair on our local retailers who pay tariff duty and GST on their bulk shipments. The government acknowledges that a lower threshold would help to level the playing field, but there’s no quick or easy solution.

“Customs has carried out extensive work and consultation over the past year but needs to look into more detail around what some of the collection mechanism options could look like and what the border transaction fees might be.

“Once Customs has a better understanding of the best ways to collect tax for low-value imports, we will look to lower the threshold, potentially from the 2018/19 financial year.

“While that would be fairer and help to protect the integrity of our GST system, it would not be appropriate to propose any changes in the short term without appreciating its impact on industry and consumers.

“By lowering the threshold too soon, there is a risk that goods to be held up at the border needlessly, and that collection costs would exceed revenue gained.

“No changes will be made without public consultation. Everyone will have an opportunity to get the full picture and make submissions at that stage,” Ms Wagner says.

ends

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