Online shopping was one of those things that the retail industry generally – and the Australian retail industry specifically – thought seems like such a niche thing that it was never going to take off and there was no point in competing, right up until the point when they abruptly realised that it had already all but killed them.
This is largely because it turned out that people don’t necessarily love the inconvenience of travelling somewhere to not find what they’re after, as opposed to clicking a mouse and then getting on with their day. All that time and inconvenience was a big of the old retail system, not a feature.
But the retail industry fought back, claiming that these international upstart stores that beat them to the punch weren’t playing by the rules because they, unlike bricks and mortar stores, weren’t charging GST.
The reason is fairly straightforward: if you’re not being taxed as an Australian business, why on earth would you agree to be a de facto tax collector for them? But the government agreed that this was a loophole that needed closing and thus as of July 1 you will be paying a GST-sized surcharge on your overseas online purchases, supposedly.
There is, however, some questions about how exactly this will be implemented.
While it’s not going to be hard to tax large players with a strong local presence – ASOS or Amazon, say – there are some loopholes: one, “the new online tax will only be collected from self-declaring overseas retailers with turnovers of more than $75,000” and – and this bit is fairly important – “the Australian Tax Office has no power to punish those beyond the ATO’s jurisdiction.” And let’s be clear: the ATO’s jurisdiction doesn’t apply in other countries.
So while some companies will presumably want to comply in order to keep the government onside, your independent fashion labels and self-funded artists are probably not going to give too much of a damn about this ruling – and will pass the savings on to you, through sheer indifference!
