Sales tax bill welcomed but 'will it work'?

Sales tax bill welcomed but 'will it work'?

While the Federal Government may have bedded down its sales tax reforms, a number of Australia's most influential distributors and retailers are unconvinced that loopholes won't emerge.

Industry heavyweights said the Government's tax reforms and accreditation are welcome and they hope the rules will be enforced. The legislation, which was passed late last week, will affect all dealers of Part 7A goods such as PCs, portables, monitors, keyboards, printers, CD-ROM drives and memory.

But is the new legislation able to combat the backyarders?

Braham Shnider, national sales and marketing manager for ITG computers, feels that the Government's decision wasn't enough.

"It is good that the Federal Govern-ment is doing something to address this issue that is clearly a problem in the industry," he said.

"But I think the cost of compliance is going to be very high. The only way that you can actually address this issue is a flat-based tax on all goods and services, regardless of what those goods are or who you are selling them to, which is a GST. I think this is just window dressing -- but I do think the Government is having a legitimate go at solving the issue."

Tony Gattari, Harvey Norman's computer group controller, is "ecstatic" that the law has been passed. He says it will change the nature of the computer industry, but remains concerned that those people the changes were designed to stop would find a way around it.

"If there is any way that they can find a way around it, they will. They're very crafty operators.

"I personally believe that at least 50 per cent of dealers have potentially been fraudulent in some way. I believe the amount of sales tax evasion, in terms of lost revenue, is not $80 million but five times as much. I believe it's around $400 million," said Gattari.

Laurie Sellers, general manager of i.t.connXions, was concerned with the "extra burden" on accredited dealers; while James Robbins, national marketing manager of CHA, echoed Gattari's concerns over loopholes. Michael Bosnar, MD at Prion, felt that the timing of the legislation was inconvenient, coming at the end of the financial year.

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