Tax net to hit buyers on the Net
CANBERRA: Internet shoppers will be forced to pay GST on purchases under $1000 for the first time, under a revamped Federal Government drive to boost tax revenue.
Treasurer Joe Hockey will tell state treasurers next month he is determined to implement the plan, concerned that Aussies are splashing billions of dollars without a cent staying in the nation’s economy.
Australians spend $17 billion a year online, with fashion houses such as ASOS and NetA-Porter as well as global retailer Amazon among the major beneficiaries.
Mr Hockey was gobsmacked to discover one overseas fashion site was flying at least three jumbo jets full of clothing to Australia and yesterday declared that the days of online purchases under $1000 escaping the 10 per cent GST would come to an end.
“We’ve now found a way to ensure that those providing goods from overseas, into Australia, do not get any advantage out of the tax-free threshold,” Mr Hockey said.
The controversial move has previously been blocked by the states but it is understood the strongest opponent, Western Australia, has now softened its position.
One option, which could make it easier for the Government to collect GST on overseas parcels, would see customers paying the tax when they picked up their parcel from Australia Post.
GST is applied to goods imported online if their value exceeds $1000.
Early modelling revealed lowering the threshold to $20 would raise more than $550 million but cost $2 billion to process.
Assistant Treasurer Josh Frydenberg has argued the threshold was too high.