First we thought it might be happening, then it was reported it wasn’t happening, but now it’s apparently happening again. Come the Federal Budget the government may tell Australians they have to start paying tax on Steam.
Earlier this week The Australian reported that Ministers had dismissed the idea of hastily adding a so-called ‘Netflix Tax’ to digital goods bought online. There is an issue to be solved: retailers have to apply GST on goods bought within Australia, but goods bought digitally overseas don’t have the same problem. Previously it was reported that the Federal Government wanted to work out a more elegant solution that reduced the $1000 threshold currently applied on goods bought overseas.
Regardless, it looks that we may be paying an extra tax on Steam purchases — and eBook purchases and any digital purchase for that matter — sooner rather than later.
The Age is now reporting that the ‘Netflix Tax’ is back in the running for the upcoming budget and it would add 10% to all digital purchases. Apparently the lack of a tax in this area of retail amounts to a potential loss of $1 billion in tax revenue. That’s a lot of money, and it makes competition difficult for local retailers who have to deal with GST.
But at this point it’s difficult to say with any certainty whether the upcoming budget will make these changes or not. We’ll find out next Tuesday when the 2015 budget is released.