Online shopping tax could add 250% extra to internet purchases 23



View Profile

Just when we were really enjoying online shopping, the Government wants to penalise us for it.

Most people know that buying goods online can be cheaper than going into a shop, especially if that online store is based overseas. But now, online shoppers could be slapped with a 250 per cent tax price hike when they buy bargains online if the push to lower the GST threshold is granted.

Currently, any goods bought overseas under $1000 don’t attract GST, but this could change if these rules are abolished.

Consumer advocacy group Choice has found a $20.30 book from an overseas-based online store could be marked up by 256 per cent to $72.34 and a $24 dress marked up by 223 per cent to $77.60.

“We’ve found that collection and processing fees could add costs of up to 256 per cent for purchases under $100,” Choice’s Matt Levey told Fairfax.

“That’s using estimates from the Productivity Commission, who in 2011 said average collection costs as low as $50 a parcel were based on ‘highly favourable assumptions’.”

Local retailers are blaming overseas online stores for slow sales in store here in Australia and are leading the fight to drop that threshold to around $20, meaning that nice dress you wanted for $25 could be $70 or more once you checkout.

Mr Levey said talk from retailers about a “modern” approach to an internet tax which “deferred costs from government” was code for “make consumers pay”. Do you agree?

“Shifting the costs does not make the costs disappear. It does not benefit the Australian community. It just reduces competition and hits household budgets,” he said.

“Pretending they are doing this to avoid a 10 per cent tax is ridiculous, although if it becomes a 256 per cent increase then it will clearly put people off”.

Treasurer Joe Hockey’s 2015 budget promise to “level the playing field for Australian businesses by mandating that foreign businesses supplying digital products and services are subject to the GST” seems to be coming to fruition if the new legislation is passed.

So what does Choice believe should be do? They want the government to make Australia Post more efficient for online shoppers and only change the GST threshold if consumers aren’t worse off.


We want to know – how often do you buy online? Is the price more important or the convenience?

Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. well that probably be the end of many shopping online, most shop online for convenience and to get a bargain. It is fun and you can sit at home and browse at your leisure. But I doubt this will help retailers, because I am sure many online purchases are spur of the moment. This Government seems determined to take all entertainment off us. The sooner they are gone the better

  2. Just more crap from this Government, I shop at night online and I won’t be doing that anymore. But I mainly buy small items I can do without but it will sure ruin my entertainment

    2 REPLY
    • same here, I can buy a pretty scarf or even a woolen one, or some trinkets for a couple of dollars from China & have loads of fun browsing for little expense!
      Our Government is sooo out of touch with ordinary people.. pray tell how are they going to implement this taxation?

  3. Items I buy online are products just not available in NZ. This is hardly fair when NZ companies just dont want to provide that service and we often have to pay GST on entry anyway! Why cant we have the choice?

  4. We already pay extra when we shop online because we pay for postage, what a miserable Government this is

  5. Well expect more job losses at Australia Post, the only thing keeping them going are these items people buy online , they have to be mailed and delivered. We will end up with no mail service at all

  6. It is ironic that one of the main complainers about loss of business at his stores is the owner of a chain of stores which regularly rates very badly for customer satisfaction, Harvey Normans. I know I dislike the way they push products with dodgy advice. This sounds like a complex tax to collect as there are so many different scenarios. I notice I already pay GST on my streaming service. Apart from goods, there are online services and content, and in game purchases. What about buying overseas for overseas contacts, is the tax at purchase or delivery. Sounds like a dumb idea and could be as complex as the GST working out what is included or not. Some products too simply are not available here.

  7. I thought that the GTS was 10% not 250%, even at 250% GST it would still be cheaper to buy on line than from some retail shops…

  8. What it means to my business, I don’t know. I have an online store based here, but I purchase 95% of my stock from overseas supplier’s websites because it’s just not widely available here. I already have to earn back the 25% extra in currency discrepancy and the cost of insurance and shipping. If I’m reading it correctly, I’ll be out of business and have to go on the dole until pension age. Great work, Hockey!

    1 REPLY
  9. Why should on-line shoppers not pay GST which 10%, not 250% as claimed by some, sure they have overhead costs but they should not be more than a few percent.

    1 REPLY
    • We are already paying double the price for things available in America….I pay double the price for make-up here and more than double the price for clothes! How can the Government justify such greed

      1 REPLY
  10. What a joke. When you live in the outback as I do, you often can’t get what you want locally so you buy online. I don’t mind paying GST on overseas purchases but 250% … incentive to go live overseas.

Leave a Reply

Your email address will not be published. Required fields are marked *