A furious National Retailers Association has lashed out at consumer advocates Choice, accusing them of running a ‘scare campaign’.

The remarkable outburst came after Choice claimed that the inclusion of new taxes on online purchases could drive prices up by more than 250 per cent.

As it stands now, any purchases made from overseas retailers do not attract the 10 per cent goods and services tax. This is under review, with the Federal government investigating plans to extend the tax to all purchases made overseas.

Australian retailers are outraged at the current tax exemption, claiming their businesses are at a 10 per cent disadvantage because of it.

But in a submission to a Tax Discussion Paper to the government Choice asserted any plans to lower the threshold could add up to 256 per cent to purchases under $100.

“Collection and processing fees [could turn] a $20 book from an overseas online store into a $72 book,” said Matt Levey, Campaigns Director with Choice.

The figure is based on a Productivity Commission report issued in 2011. It estimated the cost of collecting the new tax would equal $50 per parcel.

The National Retailers association and the Australian Booksellers Association hotly dispute the figure..

First off, the collection figure would be much less if it were the overseas retailers collecting and passing on the 10 per cent tax, rather than the Customs Office being given yet another job to do.

Secondly, “The idea that adding 10 per cent GST is going to add 250 per cent to the cost of books is outrageous,” said Trevor Evans, National Retailer Association chief executive. “It doesn’t even allow us to have a sensible debate about the reasons why we should or shouldn’t close this loophole.

“This is a scare campaign by a group looking for a reason to campaign against something which is really about protecting Australian jobs and the integrity of our tax system.”

Matt Levey from Choice returned, “A system which put the GST on at the point of overseas purchase and only added a 10 per cent cost to the consumer is something we’d furiously support. But it hasn’t been done.

“European countries are part of a common market and the US has much lower prices of consumer goods than Australia. There are different dynamics at play.

“We don’t apply taxes just to benefit certain parts of the retail sector, we apply them to benefit the community,” said Mr Levey

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