Assistant Treasurer Michael Sukkar has now requested that the Board of Taxation undertake a review of the Low Value Imported Goods (LVIG) measure, which ensures that GST is applied to imported goods with a customs value of less than $1,000.
The measure, introduced on 1 July 2018, requires suppliers, online platforms and re-deliverers with an Australian GST turnover of $75,000 or more to register, collect and remit GST to the ATO.
The Board of Taxation will now assess the effectiveness of the LVIG regime and ensure that it satisfies the policy intent of ensuring low-value goods imported by consumers face the same tax regime as goods that are sourced domestically.
It will work closely with the Treasury, the ATO and the Australian Border Force to assess industry compliance with the regime as well as the effectiveness of the administration of the rules.
The board will also be tasked with considering international developments and experiences regarding the collection of GST and other consumption taxes.
The Board of Taxation will provide its final report to the government by 17 December.
“The GST on low-value imported goods was introduced on 1 July 2018, removing the unfair advantage foreign businesses had prior to that,” said Mr Sukkar.
“Before this date, goods imported directly by consumers costing $1,000 or less did not attract GST and only high-value goods with a customs value over $1,000 were assessed and charged GST at the border.”
The LVIG measure, first announced in the 2016–17 federal budget, was expected to raise $300 million over three years.
Its effectiveness exceeded conservative expectations, with the ATO reporting that it had collected over $250 million within the first nine months of the new regime, outstripping forecasts by $180 million.
The ATO’s most recent GST administration annual report shows that it had collected $385 million in low-value imported goods GST for the 2019–20 year.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.