This one might be a little tougher to get around than with just a VPN.
Online retail giants have today floated the previously-ridiculous concept of blocking Australian shoppers from buying or selling goods through their marketplaces, unless the Government drastically changes its mind on its incoming changes to the GST.
eBay, Amazon, Etsy, and Alibaba have all suggested a scenario that would see Australian users effectively geoblocked from using their services, should the Government’s changes to the taxation system – which are set to bin the GST-free threshold for goods bought outside of Australia with a value under $1,000 – push ahead.
Fronting a Senate economics committee in Melbourne earlier today, representatives from all four companies attacked the Government, asserting that the changes to the taxation system presents a number of “unfavourable outcomes.”
Earlier, the Treasury admitted that the proposed changes to the GST – introduced by then-Treasurer Joe Hockey in 2015 – were pushed through without a regulatory impact statement being completed. The department also admitted that enforcing the GST on all goods online-imported into Australia was in breach of its own best-practice requirements.
The changes, which are set to take effect from July 1st this year, would require any overseas business with an annual turnover greater than $75,000 (i.e. y’know, fucking all of them) to register with the ATO to collect GST on all goods sold to Australian consumers.
The consortium of businesses, which represent the largest online retailers in the global marketplace, asserted that such a taxation was absurd and unlike any tax hike seen in any market across the planet.
Jooman Park, managing director of eBay Australia & New Zealand, stated that the taxation effectively forces companies to establish a new, standalone company just within Australia.
“It is a huge, global business risk.”
“Even if we were given [more time], we are not sure we will end up making the decision to create this tax collection capability. We run an $80 billion business based on one global platform. Your requirement is almost the same as just developing a separate Australian site.”
“It will cost a lot to invest, and second, under the bill we are subject to the financial risk — if our sellers refuse to pay GST, we are liable for that. We don’t understand why we have to take that financial risk.”
When pressed by Senators, all four companies confirmed that geoblocking Australian consumers could be an option if the GST changes push through. All four companies expressed intention not to comply with the new changes, meaning consumers would be theoretically locked out of the global marketplace.
Etsy public policy spokeswoman Angela Steen asserted that such a move would be “devastating” to their business model.
“Quite honestly we’re left with a number of unfavourable options, and [denying access] is our absolute worst-case scenario.”
“Blocking stay-at-home mums from being able to achieve a sale is frankly devastating for us and our business model.”
The conjecture between the companies and the Government stems from the lack of clarity over how such a taxation model would be enforced, and whether the costs incurred by collection would actually exceed the money raised from the tax, combined with the comparatively short amount of time given to companies to assess the changes and comply.
Consumer watchdog CHOICE expressed “deep concern” about the bill. While they have asserted they’re not against charging GST on small-cost imports, they have extreme concerns about the model proposed by the Government, fearing that it may indeed result in restrictions for Australian consumers.
“However any system to collect this tax must raise more revenue than it has in collection costs, and two, it should not lead to unnecessary restrictions on Australian consumers accessing goods, either from companies withdrawing services or companies being blocked.”
While it’s the big companies are up in arms about the new bill, the laws would also have massive implications for smaller, independent operators who likely would not be able to offer goods to Australian consumers after the changes take effect.
For the time being, the laws are still scheduled to be implemented from July 1st.
Photo: Dan Kitwood/Getty.