Australian importers enjoy low tariff rates by world standards, with most goods attracting a flat duty rate of just 5 per cent; however, tariffs on some imported items are as high as 17.5 per cent, which can cost businesses thousands of dollars when applied to large shipments. Read on for three ways your business can reduce its tariff burden to save money and pass on lower costs to consumers.
1. Apply for a Tariff Concession
The Australian Border Force (ABF) operates a tariff concession program designed to assist importers who are unable to source locally-produced equivalents of the goods they sell. Under the program, the ABF can order a certain class of goods to be exempt from duty when it is satisfied that no local substitutes are available.
The Department of Immigration and Border Protection maintains a database of goods that have been granted an exemption from duty. Businesses that import goods on this database do not need to apply for the concession. If your business imports goods that are not listed on the register, you can apply for your products to be listed on the database by contacting the ABF or a tariff consultant.
2. Import from Free Trade Agreement Countries
Australia has signed free trade agreements (FTAs) with a number of countries, including the United States, Canada, China, Japan, South Korea and Thailand. Goods that are imported from these countries may attract a lower or nil rate of duty.
If your business imports goods from non-FTA countries, consider exploring options for importing the same goods from a country with which Australia has signed an agreement.
3. Engage a Tariff Consultant
Australian customs legislation is very complex. Imported goods are categorised into one of several hundred tariff classifications to ensure the correct rate of duty is charged, and it is incumbent on importers to self-assess the correct classification. Tariff consultants and customs brokers are experts in Australian tariff classifications and will explore every avenue available to reduce your duty liability.
According to the Department of Immigration and Border Protection, customs brokers also have access to lower clearance fees than the general public, which can help lower the cost of imports even further. Successive Australian governments have taken steps to drastically reduce tariff rates for imported goods, from highs of more than 35 per cent before the 1980s, to less than 5 percent on most goods today.
However, customs duties are still a significant expense for many Australian importers. By following these tips, you can help reduce the burden of tariffs on your business, enabling you to become more competitive in the domestic market.