Retail veteran Solomon Lew has had enough of foreign companies avoiding GST by delivering to Australians from overseas. He’s now going to find a way to avoid paying the 10% tax himself.
Lew’ss company Premier Investments, which runs stores including Portmans, Peter Alexander and Just Jeans, is working on the problem now.
“I will be asking my executive team, in 2015, to find the path to ship online product to customers into Australia GST and duty free,” he says.
Lew points to the apparent approval by the Australian Government of a new Australia Post service, SHopMate, to help people get delivery from overseas and avoid GST and customs duties.
He says local retailers are at a significant competitive disadvantage because successive Australian Governments haven’t been able to mount an appropriate policy response.
International online retailers are legally exempted from applying and collecting the GST for all merchandise under $1,000.
“I simply fail to comprehend why it is apparently beyond the capacity of the Australian Public Service to provide policy options to the Government which are cost-effective,” he told his company’s AGM.
Advisory firm EY has calculated the lost tax revenue at $2.49 billion over three years.
“The competitive advantage which international online retailers are given through this loophole protects them from fair competition,” Lew says
Premier Investments posted an underlying net profit before tax of $106 million, up 10.3%, for the 2014 financial year. Sales were up 6.2% to $888.4 million.
The company is trading about 0.85% higher today at $10.53.