You'll Soon Be Paying GST on All Your Online Shopping

Get in all your impulse buying before it's too late.
Tom Clift
Published on August 22, 2015

Bad news for online shopping addicts: Federal Treasurer Joe Hockey has declared his intention to abolish the $1000 GST-free threshold on overseas purchases by July 1, 2017. The announcement, which came after a day of tax reform talks between state and federal treasurers, means that all items purchased from overseas retailers, including those bought through online shopping services such as Amazon, will soon be subject to the same standard 10 percent GST surcharge as items purchased in Australia.

Speaking to reporters on Friday, Hockey said that the change will help deliver "competitive neutrality for Australian businesses, and ensure fair and equal treatment of goods and services. If goods and services would have the GST applied in Australia, then the same should apply for goods from overseas." He also stated that the decision had been made "with the unanimous agreement of Labor and Liberal states and territories".

Hockey told the ABC that "what it effectively means is that we're going to have taxation officials travel around the world and visiting these companies and asking them to register for GST purposes." Only those companies with an annual GST turnover of more than $75,000 will be affected. This will also include companies that provide digital content services, such as Netflix and Facebook.

If overseas companies prove unwilling to comply with Australian government requests, an alternative method of collecting the GST could be for Australians to pay the surcharge separately upon receipt of their purchased item. The potential issue with this method would be the cost of assessing each item as it reaches the border – something that Hockey as dismissed as "plainly ridiculous."

The treasurer is apparently confident that the amount of revenue raised by this new scheme will outweigh the costs of enforcing it – despite recent findings by the Productivity Commission to the contrary. According to news.com.au, however, a spokesperson for Mr. Hockey yesterday admitted that the treasury has yet to perform any modelling on the economic impact of the proposed changes.

Ultimately, the most depressing thing about this story is that regardless of whether we end up paying the GST, it may still be cheaper to purchase things online — which does rather put a damper on Hockey's 'levelling the playing field' rhetoric. As it stands now, you've got just under two years to get in all your impulse buying before you get whacked with an additional fee.

Image: Dollar Photo Club

Published on August 22, 2015 by Tom Clift
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