Most goods imported into Australia that are valued at $1000 or less (low value parcels) are not currently subject to GST. These arrangements are aimed at reducing compliance and administrative costs. However, this ‘low value threshold’ also means that significant GST revenue is foregone; and that Australian suppliers of goods are placed at a competitive disadvantage. In 2011, the Productivity Commission found that there was in-principle justification for reducing the threshold on the basis of tax neutrality but significant cost reductions in parcel processing would need to be achieved if a reduction in the GST threshold was to be feasible. The Low Value Parcel Processing Taskforce (the Taskforce) examined options to improve the efficiency of importation and handling procedures for low value parcels. On 3 December 2012 the Australian Government announced its interim response to the Taskforce’s report. The Government will examine ways of improving the efficiency of low value parcel processing, with a view to potentially reducing the low value threshold for GST in the future. A Regulation Impact Statement was prepared by the Treasury and assessed as adequate by the Office of Best Practice Regulation.
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