eBay says the coming 10% GST on goods bought from foreign sellers may force the online platform to block Australians buying overseas.
The current GST exemption for goods of less than $1000 will end on July 1. Platforms, such as eBay and Alibaba, will be required to collect the tax to bring them in to line with domestic sellers.
However, eBay in a submission to the Senate Economics Legislation Committee, says the proposed legislation is complex, inconsistent and unworkable.
“It is open to abuse by foreign companies, it exposes Australians to the risk of double taxation, it will reduce price competition and choice for all Australians who shop online, and it will drive online trade away from trusted, cooperating online marketplaces to the dark parts of internet,” says eBay.
The online selling platform says the new rules may force eBay to prevent Australians from buying from foreign sellers.
“No tax would be paid to Australia and none would be owed,” says eBay.
“It would raise no revenue, deny Australians access to choice and lessen price competition.
“This solution would not even represent a win for bricks and mortar retailers, because Australians would still find ways to buy online.”
eBay argues that there is no practical way to enforce overseas businesses to abide by Australia’s GST laws.
In a joint submission to the Senate committee, eBay, Etsy and Alibaba say they are online marketplaces, bringing buyers and sellers together.
Their platforms don’t set prices or handle goods or even have legal title to what’s being sold, they say.
They compare the GST collection to the landlord of a shopping centre being required to account for GST on goods sold by each store.
A Deloitte Access Economics study, commissioned by eBay, says more than 1 million Australians are offering goods or services on digital platforms such as Airbnb, Airtasker eBay and hipages.
“Platforms have increased choice for buyers, opening up a worldwide market to choose from,
meaning that products are more likely to be what they are after,” says the study.
Consumer benefits, in terms of choice and convenience online, is estimated to be worth $9.5 billion to the Australian economy, says Deloitte.
“Platforms open up a world of potential buyers,where bricks and mortar-only businesses are more likely to be restricted to local markets and advertising, digital platforms have significantly reduced the cost of reaching a global market,” says Deloitte.
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