IN A GLOBAL ECONOMY, THIS IS A BACKWARD STEP

Australia has always been at a geographical disadvantage when it comes to trade, but the advent of the Internet changed that. Small Australian businesses can now trade easily and economically with the rest of the world. But global ecommerce only works effectively when it is ‘frictionless’ which is why no other country has restricted their ecommerce economy by putting a GST on all imports, including low cost ones. In an increasingly global economy, this is a dangerous precedent by the Australian Government and a backward step in a time when we should be embracing the technological opportunities for Australian businesses, not putting red tape on them.

IT WON’T RAISE ANY SIGNIFICANT REVENUE

In 2015 the Federal Government asked the Productivity Commission to look into applying GST on all overseas purchases. They looked at a threshold of $500 and collecting the GST at the border through Australia Post and Customs. That proved too expensive and the Productivity Commission reported that most transactions had an average price of less than $100. So the Government floated a $20 threshold, but the Productivity Commission found that the current tax and duties collection process was “not efficient” and that the cost to collect the revenue would be $2 billion – far outweighing the $550 million it would bring in.

THE GOVERNMENT ASKING THIRD PARTIES SITES TO COLLECT THE TAX FOR THEM

Currently the Government collects GST only on overseas purchases worth over $1000. It collects this via its Customs and Australia Post agencies. The Government looked at reducing this amount down to $500 but their own Productivity Commission found it would cost far more to collect the tax then the revenue it would raise. So now they have asked third party sites to collect the tax for them, even though these are marketplaces not sellers.  Turning marketplaces into tax collection agencies will cost significant money and resources which they will divert away from growing small businesses like Disrupt Sports.