FIA labels Customs a “toothless tiger” over enforcement of $1,000 import GST threshold

The Fair Imports Alliance has labeled Customs a “toothless tiger” after viewing the final report on its three-month campaign into the enforcement of the $1,000 import GST threshold.

Earlier this week, Customs released the final report of its Enhanced Compliance Campaign, launched at the start of January to ensure compliance with the Government’s $1,000 import threshold.

The campaign, which ended in March, was announced late last year as part of a Productivity Commission inquiry into the future of the threshold.

FIA spokesperson Brad Kitschke says after receiving the report, he is still concerned the “poorly enforced” threshold is subject to widespread abuse, arguing there are problems with Customs’ approach to the issue.

“The report indicates that for every package identified as having been undervalued, the average revenue was $330 for imports by air and sea cargo, and $275 for international mail,” Kitschke says.

“This indicates there is a problem with deliberately undervaluing to avoid the application of tax.”

“We know there are overseas websites that advertise they will deliberately undervalue packages which are over $1,000 in value to avoid the application of taxes and duties.”

In its report, Customs states: “Where instances of non-compliance have been identified, Customs and Border Protection have taken steps to ensure these are targeted as part of our normal business, including issuing advice to operational staff and refining our profiles.”

Kitschke says the FIA has attempted to obtain information from Customs about the number and value of fines issued for deliberate rorting of the threshold, but Customs has informed the FIA that it doesn’t have that information.

“If you deliberately undervalue imports and you do it regularly, such as businesses taking advantage of the threshold, you should be subject to a penalty. Customs is a toothless tiger,” Kitschke says.

The FIA has also criticised Customs’ lack of industry consultation prior to the campaign, arguing claiming it precluded the campaign from properly addressing all the issues.

“Before this campaign started, Customs should have… asked industry where it thought the problems were and where it thought there was widespread abuse,” Kitschke says.

“The Fair Imports Alliance provided Customs a report about its concerns regarding misuse of import regulations but there wasn’t any consultation before the campaign started.”

“Many of our concerns haven’t been addressed and there still isn’t an accurate record of the widespread problem.”