The Department of Home Affairs (DoHA) is considering whether every package imported into Australia should be hit with a new levy, to help cover the costs of screening items at the border. GST already applies for packages worth more than $1,000.00, but the Government’s plan would see shoppers having to shell out the extra charge for all overseas purchases. The ABC has reported that a tax of between $2.00 and $7.00 is under consideration, while SMH & 9News have both speculated on a $5.00 levy.
Nearly forty million of the ‘low value’ parcels arrived in Australia last financial year — roughly two per person. DoHA predicts the number of low value consignments entering the country will increase by a further by 31% over the next four years, compared with only 10% expected growth in high value consignments. Items arriving through international mail have different reporting requirements and do not require Self Assessed Clearance (SAC) declarations. There is scope, however, to consider comparable models that would recover the costs of cargo and trade border activities undertaken by DoHA. For example, the Dept. of Agriculture & Water Resources (DAWR) recovers the costs of managing the biosecurity risks associated with international mail from Australia Post through an annual fee arrangement. A DoHA annual fee arrangement with Australia Post, along with a low value consignment cost recovery levy, would comprehensively address issues of cross-subsidisation and ensure fairness of cost recovery arrangements.
A Discussion Paper on the proposed tax argued the levy was needed to recover costs associated with biosecurity, cargo and trade border activities. The Paper outlines the background to spreading the cost recovery load currently borne by 10% of all shipments which exceed $1,000.00 value and pay the Full Import Declaration (FID) levy – to include the other 90% of shipments below $1,000 value covered by SACs, etc. The Paper also shows freight and express couriers would wear the bulk of the levy, along with any individuals who import more than 1000 items a year.
The Government says this will help recover the costs of screening items at the border as existing cost recovery arrangements are no longer sustainable and will not support Australia’s future trading environment.
