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| australian government slugs small business Posted: 05 Jul 2012 10:57 PM PDT  So here I am, struggling to make a living at repairing computers, so I decide to diversify into selling computers, smartphones, and Android tablets via No Nonsense Computers online. With the tablets and smart phones, I research various suppliers, and obviously I cannot compete unless I buy from China. I then start to import small amounts of good, to check for quality problems, and gradually increase my purchases. The last shipment I ordered cost me $1500 (plus $180 in freight cost, plus 3.3% ($50) for paying via paypal). Since I’m ordering something thats over $1000, customs jumps in and hits me with $241 for Duty and GST. So, I’m now paying an extra $471 (31%) extra for the goods!!! Now, who am I competing against? Lets see: If an average person buys the exact same stuff from ebay, direct from china, they pay no duty (the goods are less than $300 each), no GST, and often the shipping costs are reduced due to economies of scale by the seller in china. I now have to try to sell my goods for an extra 31% (just to break even, and make no profit!!) So what options do I have? I’m left with attempting drop-shipping, so that each individual item is shipped directly to the customer, and I avoid paying 14% in GST and duty costs… I also cannot check the goods for quality and cannot do any value-adding (like install software, and extra configuration). It doesn’t sound legal, but you could look at it as me acting as a “facilitator” between the manufacturer and the end-customer… So, does this sound like the Australian Government cares about encouraging small businesses? Not if the business needs to start by importing goods for resale, and particularly when people can buypass government taxes by buying direct from overseas. This is probably going to fall on deaf ears in Camberra, but the $1000 limit before you get hit with duty and GST should be raised to $5,000 or even $15,000 This will encourage small businesses to start and then establish a local market before then they can start paying duty and GST. Even a sliding scale (similar to income tax) would be great: up to $5000 per shipment is tax free, then every dollar over $5000 is taxed at 25% up to, say $100,000, and every dollar over $100,000 is taxed at 35% If the government was serious about encouraging small businesses, then they need to change how they implement import duty and taxes. Related posts:
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