Federal Treasury wants Australia's online shoppers to pay 10% on goods under $10

[ChrisW]

http://www.heraldsun.com.au/news/national/federal-treasury-wants-australias-online-shoppers-to-pay-10-on-goods-under-1000/story-fndo471r-1226478405485

Take a good look lads, if your ordering from Digikey, your cost could go up very shortly.

[PeterG]

This is not the first time they have tried this. I dont see it happening.

Regards

[poptones]

It's inevitable. Think of all the cheap crap coming in through ebay.

[Uncle Vernon]

An unsubstantiated piece of rubbish. Treasury set the $1K limit based on collection and administration cost. Put simply it cost more to enforce than revenue gained on small transactions.
Business customers however should be making contributions particularly when making regular sub $1K international transactions.
Dinosaur Australian retailers are the only one pushing for this application of additional personal tax. Their greed being the root cause of their inevitable demise. Give it away Gerry your time has come and gone.   

[Ed.Kloonk]

Liberals want it. Mr Kevin Connolly talking on Hawkesbury Radio this morning. He eluded to GST recipts being less than the state Govt anticipated and therefore could not afford as many police and nurses as they would have liked.

[Uncle Vernon]

Liberals want it.

You mean State Governments want it! Of course they do, but then they would be the recipients and not those bearing the costs of collection and administration.

[nukie]

This makes me want to buy more stuff from overseas!! Eh hem x-on can sometimes be cheaper than digikey.

tapatalk

[poptones]

Just a quick quibble: "elude" means to avoid. "Allude" means to imply; to hint at.

I'm not in favor of paying more taxes, but something inevitably needs to be done on this matter throughout the world. Local businesses are penalized by imposing a 7 to 10 percent increase on prices they charge to their customers. I make my living buying stuff and selling it on ebay and it seems to me this is inevitable. This imbalance effectively pushes money out of local communities.

[Uncle Vernon]

something inevitably needs to be done on this matter throughout the world. Local businesses are penalized by imposing a 7 to 10 percent increase on prices they charge to their customers. I make my living buying stuff and selling it on ebay and it seems to me this is inevitable. This imbalance effectively pushes money out of local communities.

The simple solution would be for taxation to be applied to foreign transfers with such tax acceptable as a GST credit. The banks don't miss you when spending or receiving foreign funds, so it would be relatively easy for a federal tax to be applied at that point.

Advantages of scale would have local retailers looking more attractive as they utilise bulk deals on freight and goods.

[poptones]

I can buy ten electrolytic caps from china through ebay for 99 cents delivered to my door. Radio Shack charges me 1.29 for two. Yes, it's faster to buy local - but we're competing here with a country that owns hundreds of Billions of our debt and subsidizes international shipping.

[T4P]

I can buy ten electrolytic caps from china through ebay for 99 cents delivered to my door. Radio Shack charges me 1.29 for two. Yes, it's faster to buy local - but we're competing here with a country that owns hundreds of Billions of our debt and subsidizes international shipping.

What can i say? USA's debt is an order of magnitude larger!

[RCMR]

There is a huge amount of pressure being applied by the retail industry (in Oz and NZ) over the issue of direct imports.

There are two ways of looking at this:

1. if you purchase a product, you should pay the GST that is due as part of that transaction and therefore all imports should be taxed at the border or the payments subjected to a tax.

2. it's the 21st century and there is no longer such a thing as a "local" marketplace.  The barriers to trade are dissolving and it is now every bit as easy (if not easier) to go online and order your bits from China as it is to jump in the car and drive down to Jaycar or whoever.  With this in mind it could be said that the local retail industry will just have to adapt to the changes in technology and the way consumers shop -- in the way that many blacksmiths had to become garages when the horse was replaced by the motorcar.

There are problems with #1 (above).

Firstly, if you attempt to tax incoming consignments at the border the costs will likely be higher than the tax collected in most cases (hence the $1K tax-free threshold in Oz and the $400 equivalent in NZ).  There is also the problem of truly determining a consignment's value.  Most Chinese companies fill out false declarations and border staff don't have time to track down the true value of items.

Secondly, what about things that truly are gifts?  How would you feel having to pay $30 tax on a "gift" sent by Aunt Grizzelda in the Netherlands, only to find out that it's a really ugly hand-knitted sweater that you probably can't even give away to a charity shop?

There are also problems with #2 (above)

If you simply add GST to all transactions that involve overseas funds (ie: the credit-card companies slap your off-shore payments with the tax on behalf of government) then there's enormous potential for unfairness and excessive taxation.  I don't know about Oz but in NZ, some things are GST-exempt (fees on financial services, etc).  People taking an overseas holiday would also find themselves paying GST on the Big Mac they bought in New York and everything else they purchased while out of the country -- and those things are not taxable at present.

The best solution?

I don't have a clue.

[poptones]

Seems to me it makes complete sense to make the online retailers responsible. If I go to the local wal-mart they collect taxes on behalf of the government and then pay them forward on a quarterly basis. Online retailers would surely scream about it but there's no doubt they can do it - their entire business is driven off databases and coordination of warehouses, handling tax collection for the world is just another database to build. Collect taxes based upon the destination address and disburse the funds to those governments on an annual or quarterly basis. Exempt those retailers who don't do, say, ten million a year online, the rest can surely afford it.

[David_AVD]

Business customers however should be making contributions particularly when making regular sub $1K international transactions.

But don't almost all businesses claim the GST back anyway?  There would be no net contribution to the government in that case.  GST collection for business transactions would only be worthwhile where the goods were going to a non GST registered business.

I buy from overseas (for my business) regularly and don't pay GST, but I don't claim it back on those purchases either.  The $1000 limit makes no difference to me apart from the additional customs charges that may be levied.

[digsys]

But don't almost all businesses claim the GST back anyway?  There would be no net contribution to the government in that case.  GST collection for business transactions would only be worthwhile where the goods were going to a non GST registered business.
I buy from overseas (for my business) regularly and don't pay GST, but I don't claim it back on those purchases either.  The $1000 limit makes no difference to me apart from the additional customs charges that may be levied.

Exactly the same boat I'm in. Since the demise of most direct component representatives in OZ, I have NO choice but to buy from overseas.
As a manufacturer, it's bad enough having to compete with cheap cr@p, but to be slugged 35-100++% by the International distributors,
stinks. Now I use freight forwarders like Shipito (avoids the usual rip-off fixed freight charges).
For personal items, unless the price difference is >20% (depending on value), there's not much point, and I'd rather support local.
BUT, if the product isn't available here, you have no choice. I'd hope they put exclusions back ie 2nd hand items, IF they go for it.
History tells us that they'll likely screw it up anyway and many will just devalue the goods.

[David_AVD]

Some (mainly Chinese) suppliers understate the goods value thinking they are doing you a favour.  Sometimes the declared value is so low that it looks suspicious and is more likely to get delayed for inspection as a result!  I'd rather they just declare the actual (as invoiced) value.

[RCMR]

Some (mainly Chinese) suppliers understate the goods value thinking they are doing you a favour.  Sometimes the declared value is so low that it looks suspicious and is more likely to get delayed for inspection as a result!  I'd rather they just declare the actual (as invoiced) value.

Absolutely!

Some suppliers allow the customer to specified the declared value and in such cases I always make sure I specify the *actual* value.

If the law allows me the ability to import stuff valued at under a certain amount without paying GST on it then I will certainly take advantage of that where it is appropriate but to falsely declare a value is dishonest, unfair and probably illegal.  If GST is due, because the item exceeds the threshold, then I will happily pay it.