ON 13 April the Australian Border Force issued Australian Customs Notice No. 2022/21, advising that there would be a new rate of customs duty for imported goods from the Russian Federation and Belarus effective 25 April. Imports from Russia and Belarus before this time have enjoyed import duty rates of 0% at the very least and 5% at the very highest (excluding goods considered to be dumped or for goods subject to excise).
From 25 April, the new import duty rates will increase from the lowest rate of 0% to 35% and from the highest rate of 5% to 40%. Russia and Belarus are not major suppliers of imported goods. Australia mainly imports fertilisers, manufactured wood, and refined petroleum from Russia; and fertilisers, medical instruments, and measuring and analysing instruments from Belarus.
If we consider the Australian importer who relies upon goods imported from Russia or Belarus, they now need to pay an additional 35% import duty and then they are required to pay a higher GST charge at the time of importation (as GST is calculated on the cost of the goods plus import duty plus shipping to Australia). The government receives these two increased taxes.
If we consider the Russian or Belarusian exporter, they are not incurring any extra fees in sending their goods to Australia; if the demand is inelastic then the Russian or Belarusian exporter would not notice a great deal of change in market desirability. Russian and Belarusian exports only become affected if the goods being exported to Australia have price demand elasticity.
If the purpose of customs notice 2022/21 was to financially impair Russian or Belarusian goods, I do not see a great deal of impairment. If the purpose was to financially hurt Australian businesses who import Russian or Belarusian imports – yes, this will occur.
The Customs (Prohibited Imports) Regulations 1956 is an instrument that could have been invoked to all Russian and Belarusian imports as being prohibited; by prohibiting all imports from Russia and Belarus, this would have/could have created more stress on Russian and Belarusian goods.
When the Russian or Belarusian goods are exported, these suppliers in their home countries are required to pay 15% and 18% company tax on their profits respectively. The Australian importer is required to pay 35% to 40% import duty, an increased 10% import GST, and 30% company tax on their profits
I don’t see how a 35% import duty levy on Russian and Belarusian imports to Australia affects Russia or Belarus. If anything, the only person affected is the Australian importer.
