The Productivity Commission this week released its draft inquiry report titled Economic Structure and Performance of the Australian Retail Industry. It examines the implications of globalisation for the retail industry and the appropriateness of current policy settings and finds that regulatory reforms are required for the industry to adapt to the global market.
On tax, the current exemption from GST and duty for imports valued below $1,000 has been found to be only a minor contributing factor to online offshore purchases. However, for reasons of tax neutrality, the Commission recommends that the $1,000 threshold should be reduced, but only when this can be done cost-effectively. This is because where the costs of collecting a tax exceed the benefits of the revenue, that tax should not be collected. Without the $1,000 threshold, the report estimates that $578 million of revenue would be collected at a cost of over $2 billion, which would be borne by businesses, consumers and government.
A floating exchange rate and the business practices of the retail industry should not determine the formulation of tax policy. I welcome your views as always via Tax Policy.
Last week I announced an event The Tax Institute is hosting (in conjunction with the ATRF) called “The Great Tax Debate: Constructing Tomorrow’s Tax System”. This day-long event will be a chance for members to listen to, question and debate with a range of notable speakers from all walks of life on their views on tax reform.
I now confirm that the following experts will speak at this event and be available for questions via a Q&A panel:
- Mr Greg Smith, former Henry Review panellist and current Adjunct Professor, Economic and Social Policy, Australian Catholic University
- Mr Henry Ergas, Senior Economic Adviser, Deloitte Access Economics
- Dr Cassandra Goldie, Chief Executive Officer, ACOSS; and
- Mr Adam Creighton, Research Fellow, Economics Program, Centre for Independent Studies.
I will confirm additional speakers as well as the program for the event next week for members who are unable to attend for the whole day.
By way of reminder, there is no charge to attend this event, but registrations are limited so I encourage you to register your attendance soon at www.taxinstitute.com.au/greattaxdebate. If you are unable to attend in person, you can instead register for the web stream.
I look forward to seeing you there as well as your ongoing involvement in the wider debate on tax reform.
Please see below for details of other activities this week.
Robert Jeremenko FTIA