Online Shopping Tax

I'm a very regular ebay shopper and i am disgusted. I've just been reading in the newspapers that the government is planning to introduce a tax on all online shopping purchases. Apparently the tax will increase the price of each purchase by about 60 per cent.

Big bricks 'n' mortar retailers have been complaining about 'losing out' on our dollars because of the popularity of online shopping. So they whinged and whinged to the government, and, because the liberals are pro big business, they have come up with this idiotic idea for another new, unwanted tax.

What they are forgetting is that alot of online shopping is about buying things that are not actually available in Australia - so it is nothing to do with shops 'missing out'.

People love online shopping because they can buy what they want, whenever they want - and get it home delivered too.

Online buyers and sellers - you shouldn't put up with this rubbish from the government. We can't let them screw even more money out of us for no reason. I love my favourite online sellers, and i do not want to see their small businesses suffer and maybe even close down, just because of the greedy bullying of big businesses and the government!

Maybe even ebay can even, hopefully, do something about this?

 

 

Message 1 of 21
Latest reply
20 REPLIES 20

Re: Online Shopping Tax

Without wasting my time reading any of your links, the titles tend to indicate wishes by State Treasurers rather than legislated facts.

 

And you can happily support other countries' economies shop from OS for another 4 months at least. Any discussions have been put back to March.

 

 

Message 11 of 21
Latest reply

Re: Online Shopping Tax

govt.jpg

Message 12 of 21
Latest reply

Re: Online Shopping Tax

 
Message 13 of 21
Latest reply

Re: Online Shopping Tax

xrayxpress
Community Member

The real problem isnโ€™t just the 10% GST being imposed on the total purchase price. The pricing model being proposed is that the buyer will also have to pay an administration fee for the tax being collected.

Say you buy a book not available in Australia from the USA for $22.00, which you think is a good price. Now add a flat $14.00 admin fee to that = $36.00. Now add 10% GST onto that $36.00 = $3.60. The final cost for that book is now $39.60, which is an 80% increase on the original $22.00. Not such a good price now.

This really is the pricing model being proposed for implementation next March. Not hard to imagine eBay USA and eBay UK could see a huge drop in sales for lower value items to Australia. People should be made aware of the true cost of this tax, as it will make purchasing such low value items uneconomic. Many non mass produced, unusual or collectable items are simply not available in Australia, so local businesses are not losing money as they donโ€™t have these items to sell anyway.

Tell other people this is what is likely going to happen. Complain to your local MP. Start an online petition. Australia already has a very high cost of living; donโ€™t let the government make it even worse by introducing this unfair tax.

Message 14 of 21
Latest reply

Re: Online Shopping Tax

I actually think this proposal is a great idea in support of Australian based sellers and especially for Australians who 'value add' items to 'onsell' or is a (wait for it....this next word may shock some, it is almost an antiquated word)....manufacturer.

 

 

Realistically, right now, the postage costs on all items from UK, USA, CAN, EUROPE are exorbitant. You have to really, really need or want something to justify these O/S postage charges and go ahead with the O/S transaction.

I believe though that most Australians are too blinkered and tunnel visioned and maybe even lack the vision to see that huge/great possibilities could come to those who, once this legislation arrives, see the opportunites in manufacturing/value adding and 'onselling'.....grabs the available opportunities, puts the hard work in and = 'success'

All other countries have same, why not Australia?

 

As for paying more for some things....well, I personally would still prefer to pay more (much more) e.g. a german made pump and indeed even pay for it in an online purchase (with more taxes even) than buy a CRa* one from Bhina for a smidgen of the price. What I am suggesting here is that Aussie sellers will have to improve the quality/origin of their stock tooSmiley Happy

Message 15 of 21
Latest reply

Re: Online Shopping Tax

you may find some of the articles easier to read found here, Dear Smiley Happy

https://www.google.com.au/#q=online+shopping+tax

Message 16 of 21
Latest reply

Re: Online Shopping Tax

I hear you but I would not be too concerned. Nothing will happen before March 2014 and as explained in the foll article (link to) it's hardly worth it.....http://theconversation.com/states-push-for-gst-on-online-shopping-is-just-small-change-20755

 

"Both Labor and Coalition states are pushing the federal government to extend the GST to more online purchases as they look for additional sources of revenue.

And while the Coalition had promised no changes in its first term, they are now โ€œleaning towards [the tax] but will insist the states lead the public campaign for such a move and bear some or all of the costsโ€, according to the Australian Financial Review.

One suggested reform, previously raised by retailers, is to lower the current $1000 exemption on imported goods.

But if the threshold is lowered and current administrative arrangements remain in place, the high costs to government and businesses of collecting GST on a very large number of parcels from all over the world mean the net revenue gains are likely to be small, if not negative.

A more ambitious proposal is to broaden the GST tax base along the lines of the New Zealand model, or to raise the GST rate from 10%. A larger GST could be part of a reform package replacing inefficient state stamp duties, increasing social security rates in a targeted manner and reducing lower income tax rates for distributional equity.

However, these changes will require a very significant and sustained investment in design and explanation to gain widespread community and political support.

Lower threshold makes sense, in principle

The GST is Australiaโ€™s broad-based consumption tax. It is applied at a rate of 10% on a base representing about 60% of domestic consumption expenditure. The larger exemptions are food, education, health, child care and water. And financial services are input taxed, which means concessions are provided to households.

In 2012-13 the GST is estimated to collect $48 billion. It is collected by the Commonwealth, and all revenue โ€“ net of administration costs โ€“ distributed to the states according to the principles of horizontal fiscal equalisation.

The general consensus is that while businesses collect the GST and send funds to the government, businesses pass forward the cost to households as higher prices for goods and services.

As a general principle, the GST is levied on imports to provide for neutral tax treatment of domestic-produced and import-sourced products. But because of high operating costs, imported parcels valued at $1000 or less are exempt from the GST, and also customs duty except for tobacco and alcohol.

Over time the share of household purchases via internet purchases from overseas has risen and this upward trend is expected to continue. The Treasury estimated a loss of gross of more than $600 million in GST revenue on imports valued at less than $1000 a parcel for 2011-12.

Some states see the forgone gross GST revenue on low-value imported parcels as an easy source of additional funds for their ever-growing health, education and infrastructure expenses.

And they have been joined by retailers complaining of a loss of international competitiveness, who are also arguing that similar taxation of all imported goods would boost local employment.....

......

In principle, the argument for neutral taxation of all consumption goods โ€“ whether produced domestically, imported in packages valued at more than $1000, or imported in less than $1000 packages โ€“ is impeccable.

However, the in-principle argument for lowering the threshold assumes zero costs to collect the GST, both for the government authorities and for business suppliers. The reality is extending the current procedures would be expensive.

The Productivity Commission in a 2011 study, โ€œEconomic Structure and Performance of the Australian Retail Industryโ€, estimated additional costs more than double the gross extra GST and customs revenue if all imported parcels were to be taxed.

Lowering the current $1000 threshold to $500 would at best break even. Since the Commonwealth returns only net proceeds of the GST, that is gross tax less its administration costs, the net gains for the states are likely to be minor,  at most a few $100 million a year.

Wider base, not a lower threshold

Investing in a more comprehensive base and higher rate GST as part of a larger tax reform package makes more sense.

First, a broad based consumption tax, like in New Zealand, has relatively low distortion costs. Using the Henry Review estimates, replacing state stamp duties and some income taxation can provide productivity gains of 30 cents or more per dollar of tax mix change.

Second, a comprehensive GST tax base, including food, education and health, would simplify the tax and lower business costs. And third, while the GST is regressive in its incidence because low income households spend a higher share of their income on food, higher income people spend many more dollars on food, education and health.

Complementary changes in the social security and progressive personal income tax rate schedule are more direct and effective ways to achieve distributional equity.

A larger GST will require complementary changes as part of a wider tax reform package to state taxes, income taxes and social security payments. And the reform package would have to consider Commonwealth-State financial relations.  None of these questions will have easy answers.

At best, some of the opportunities and the options should be explored by the promised Commonwealth review of taxation."

Message 17 of 21
Latest reply

Re: Online Shopping Tax

We pay enough tax in this country! Everything is taxed , This is why we pay so much more for all items, then what the rest of the world pays for the same products
This is another money grab and unfair to all Australians We are charged yet again another tax ++++++++++
Message 18 of 21
Latest reply

Re: Online Shopping Tax

It is not another tax.....it is an extension of the GST which has been in force for 18 years.

Why did you need to drag up this ancient thread when there are plenty of new ones about the GST?

Message 19 of 21
Latest reply

Re: Online Shopping Tax


@georgie286 wrote:
We pay enough tax in this country! Everything is taxed , This is why we pay so much more for all items, then what the rest of the world pays for the same products
This is another money grab and unfair to all Australians We are charged yet again another tax ++++++++++

I know georgie286 , it's sad that this is happening to us. Not looking forward to that. Years ago a certain garden gnome said that he would never bring it in and then he did. Guess the truth went overboard on that one.

Message 20 of 21
Latest reply