State politics blocks Australian GST foreign threshold cut

Sat 8th Feb 2014

Stalled plans to reduce the Australian GST import threshold now hinges on agreement by the States.

It is believed that the Western Australian state is blocking proposals to reduce the current AUS$1,000 GST-free threshold as part of a wider attempt to have a resettlement of federal GST revenues.  Many Australian retailers have campaigned to have the significant tax benefit for foreign online retailers reduced.  However, the Western Australian government is seeking to re-open the last agreement of the state division of Australian Goods and Services Tax.

Australian online retail is growing at over 10% per annum, and currently represents over 6% of all retail sales.  It has been proposed that the current GST threshold be cut down to AUS$20, which could raise over AUS$1 billion