The Wholesale Sales Tax on televisions, videos, stereos, cameras, watches and certain other goods will fall from tomorrow (29 July 1999).
"These reductions should be passed on fully and immediately in prices by businesses selling or supplying these goods", Australian Competition and Consumer Commission Chairman, Professor Allan Fels, said today.
"For example, if the Wholesale Sales Tax reduction is $40 then both the wholesale and retail prices should drop by $40.
"The WST rate will fall from 32 per cent to 22 per cent. The percentage impact on retail prices will vary depending on what proportion the wholesale price is of the retail price," he said.
Refunds are available from the Australian Taxation Office for retailers who have already paid the higher rate of WST on their stock on hand. Businesses should therefore reduce prices tomorrow (29 July) so that their customers get the benefit of this tax reduction immediately.
Some indicative examples of expected price reductions are:
Indicative price reductions
|
Item |
Price before 29 July 1999 $ |
Price reduction lower range (5% decrease) $ |
Price reduction higher range (7% decrease) $ |
New price lower range $ |
New price higher range $ |
|---|---|---|---|---|---|
|
Medium range colour TV |
599 | 30 | 42 | 557 | 569 |
|
Higher end stereo |
1799 | 90 | 126 | 1673 | 1709 |
|
Video player |
349 | 17 | 24 | 325 | 332 |
|
Lower end camera |
89 | 4 | 6 | 83 | 85 |
|
Higher end colour TV |
1399 | 70 | 98 | 1301 | 1329 |
|
CD player |
299 | 15 | 21 | 278 | 284 |
|
Higher end camera |
999 | 50 | 70 | 929 | 949 |
Note: These prices are only indicative. Consumers may be able to negotiate a lower price with the business.
"The ACCC's role is to monitor prices and make sure that the reduction in WST is passed on in full to the consumer. Where it believes this is not happening it will investigate.
"Not passing on the tax reduction risks breaching the Trade Practices Act 1974 and can attract penalties of up to $10 million per offence for companies and of up to $500,000 per offence for individuals," Professor Fels said.
"The ACCC is monitoring price movements to ensure the tax reductions are passed through to consumers.
"The ACCC has already completed a comprehensive Australia-wide survey of prices of goods subject to the drop in WST. It is about to commence a further survey of these outlets to evaluate the impact of the tax changes on prices to consumers," Professor Fels said.
What to do if prices don't fall
The first step is to ask the retailer why the price has not fallen on the relevant goods.
If you aren't satisfied with the retailer's explanation you can contact the ACCC Price Hotline on 1300 302 502.
- for the cost of a local call from anywhere in Australia you can speak directly to an ACCC officer who will record your complaint and offer advice.
- the Hotline will be open from 8.30 am - 5.30 pm EST Monday to Friday.
Where to go for more information
If you need more information about price exploitation in relation to the New Tax System (and the GST), you can find it on:
- the ACCC website: or
- the ACCC Price Hotline: 1300 302 502.
General inquiries relating to the New Tax System (and the GST) should be directed to the Australian Tax Office on the WST Rate Reduction Infoline: 1800 634 905.