Cheap overseas goods are about to take a hit, with the government introducing an ‘Amazon tax’ in the 2016 federal budget, applying see the GST applied to all products bought online from overseas.
This means everything from books on Amazon or clothes bought off ASOS will be 10% more expensive. The new GST will kick in from 1 July, 2017.
It will also only apply to companies earning more than $75,000 a year from Australian customers.
For this to work successfully, it means that big overseas companies will have to agree to the government’s conditions. As part of it, instead of the Border Force inspecting goods as they enter the country and applying the tax from there, as it is done now, the GST will be collected at the point of sale.
The government is expecting that the GST added to low-value imported goods will generate an additional GST revenue of $300 million over the forward estimate period.