State and Federal treasurers have agreed: the existing $1000 threshold for GST-free purchases on online goods is to be abolished. From the 1st of July 2017 all goods bought online will be subject to a 10%.
This includes, of course, video games.
How are they going to enforce that? Well, therein lies the rub. No details have been made available as to how this tax will be applied or enforced but in principle it will exist.
It is an attempt, says Treasurer Joe Hockey, by the government to level the playing field for Australian brick and mortar retailers.
Treasurers agreed to apply the GST to offshore sales into the Australian market. This is a significant initiative. From the 1 July, 2017, the GST will be applied to all products and service sold by vendors into Australia. This will deliver competitive neutrality for Australian businesses, and ensure fair and equal treatment of goods and services. If goods and services would have the GST applied in Australia, then the same should apply for goods [bought and imported] from overseas.
Hockey claimed that abolishing the tax-free threshold, as opposed to establishing a new limit, made sense. He also added that this is about policing vendors, not punishing consumers.
But, ultimately, it will be consumers who pay the price with this new change.
This, combined with the struggling Australian dollar, could herald the end of purchasing cheap online games from overseas stores.