Online shopping is great. It makes it so easy to find anything you want and have it delivered to your door within a few days. Especially when it comes to Christmas, it takes all the stress out of attempting to go to the packed out shopping centres. The costs when it comes to shopping online vary. Up until recently, in Australia, we only really had to pay for our items and shipping. But, as of the new financial year, this is all about to change.
From July 1st, there will be new GST laws surrounding online shopping. These laws dictate that businesses with an annual turnover of more than $75,000 will have to collect GST on purchases under the current low value threshold of $1000. There are already taxes that apply to packages worth over $1000, but the government have decided to extend this to the low value items as well.
Its been suggested that the tax will be between $2 and $7 per package. This will depend on how much the value of the item is and where its bought from. Statistics have shown that nearly 40 million low value parcels arrived in the country last year, meaning almost two per person. The new tax will have a direct impact on all of these purchases. Its not just the Australian public the tax will affect; it will also have an affect on lots of retailers that currently ship to Australia. Amazon has already stated that they will stop shipping as a result of the new taxes. Other retailers are attempting to make changes in order to prepare for the new changes in tax, however, sites like ASOS, Nordstrom and Macy’s may also stop shipping to Australia.
This new tax is supposedly needed to recover the costs related to trade border activities and biosecurity. Essentially, it’s designed to recoup the amount of money spent on protecting Australia from any hazardous packages from making it into the country.
The Australian Government also sees this new tax as a way to level the playing field for smaller Australian businesses. The aim is to make it easier for these businesses to survive against the bigger companies like Amazon. By making it harder for international companies to ship to Australia, the public will be encouraged to choose Australian retailers.
Unfortunately, there isn’t anything we can do about this new tax, us Australians will just have to suck it up. Although the added costs won’t directly impact our bank accounts, they will impact businesses. Due to Australia being so far away from everywhere else, its already hard enough for businesses to ship here, but these taxes will just make it worse for them. The less businesses that ship to Australia, the harder it will be for Australian consumers.
Certainly Amazon will be a big loss, and with potentially more retailers pulling out of shipping to Australia, we will have no choice but to find local online shopping retailers to meet our needs.