Australia to tax ALL international online purchases

Australia's treasurer Joe Hockey has hinted that the mooted changes to the way the country's Goods and Services Tax (GST) is collected may apply to anything purchased from overseas, regardless of value.

After much lobbying from Australia's retail sector, the federal government last week reached agreement with the states that current GST-free threshold of AU$1,000 for online purchases would be changed.

The tax reform has long been a lobbying point for retailers complaining that they're unable to compete with overseas websites on price.

Originally it was reported that the change would lower that threshold to $20, but speaking to ABC radio this morning, Hockey referred to the threshold and said “it may well go to zero”.

The government also reckons it's found the solution to the argument that it would be prohibitively expensive to collect the tax (that was the finding of a Productivity Commission inquiry into the topic in 2011).

So instead, the treasurer wants international retailers to handle the impost.

The Australian Financial Review says he told the ABC: “We can go to the Amazons, we can go to the various retailers overseas, and say you have to identify the goods you are selling into the Australian market and they will do so and that is how we are going to collect it”.

If the Productivity Commission's 2011 report is still more-or-less accurate, the tax would raise far less than a billion dollars a year. ®