Business burned by online sales loophole

SMALL business owners have called on the federal government to abolish the $1,000 import tax-free threshold, which they say is killing some industries and forcing businesses to close.

Local retailers and industry associations from the toys and hobby, fishing and tackle, camera, and motorcycle accessories sectors spoken to by WA Business News agreed that the current threshold was placing business owners at a disadvantage.

One Perth-based business owner, who declined to be named, said the issue was the biggest talking point at this year’s Australian Toy & Hobby and Nursery Fair in Melbourne.

“The problem is because the threshold is so high, consumers can buy their products online from overseas companies and land them in Australia and not have to pay tax on them,” he said.

The business owner said it was unfair his business had to pay a customs clearance on imported goods and GST, but the general public did not.

In 2005, the federal government increased the import tax-free threshold from $250 to its current rate of $1,000.

Midland-based The Honda Shop regularly has members of the public come in to try on helmets, jackets, boots, and gloves to get the size they need, then leave the store and buy the goods online from a cheaper international competitor.

“What we are asking the government is (that there be) the same rules for everyone and a level playing field, and that’s not such a big ask if it’s going to save businesses and jobs in this country,” The Honda Shop managing director Eddie Peters said.

Lobbyist and chief executive of Small to Medium Enterprise Australia, Dean Logan, said the import tax threshold was “killing” the fishing and tackle sector as Australian customers can buy a $1,000 Shimano reel for about $200 cheaper online.

He said because no tax was paid on the online purchases, the government missed out on GST revenue.

“The government has got to start looking after small businesses and Australian manufacturers in this country, so what we’re asking for is a serious discussion to get a level playing field for businesses in Australia,” said Mr Logan, a lobbyist for the Boating and Fishing Council of Australia.

He said a delegation of fishing and tackle industry representatives recently visited Canberra to voice their concerns to federal Treasury.

He said the federal government was preparing a discussion paper.

Internet sales manager at Balcatta-based Got’ya Tackle & Camping, Russell Harris, said online buying mediums made the tax threshold issue more prevalent today than when he started at Got’ya Tackle 13 years ago.

Treasury was contacted for comment but had not responded when WA Business News went to press.