Federal Government plans to install a tax on goods bought from overseas online retailers has been rejected by Cabinet Minsters.
Buying video games online is safe. For now.
The tax was previously referred to as the 'Netflix tax' and was set to add 10% to products bought online, whether they were virtual or not, in an attempt to create a level playing field between goods bought here in Australia — with the GST added — and products sold overseas to Australian consumers.
It was a move designed as a stop-gap solution. Currently consumers are only charged GST on products bought online if they cost over $1000. Meaning that smaller purchases, like video games or even video game consoles, are exempt. The idea was that the tax would have been applied to digital products as well, and on services like Netflix or Steam.
It was a popular idea with local retailers, who want to remain competitive with online retailers but remain burdened with the GST.
But Minsters have reconsidered, the idea being that a longer terms solution will be created with regards to the GST. Most likely that will involve lowering the afore-mentioned $1000 limit on goods bought overseas.
“The idea that a 10 per cent price differential was going to sway people one way or another was a bit misguided, but it’s something the local retail lobby often puts out there,” said Matt Levey at Choice, speaking to News.
“But we think it’s fair enough to say the GST should apply equally. The problem was all the associated costs and red tape that would come with applying the GST in places where Australia doesn’t have tax jurisdiction.
"Some of the propositions would have simply seen the retailers passing on the collection costs. You can’t load that onto consumers.”