"Ax, meet golden goose, golden goose, meet ax. I'm sure this arrangement will enrich us greatly!"
Tat bazaar eBay has threatened to stop Australian buyers doing business with offshore sellers if the nation goes ahead with a plan to charge local sales taxes on imported goods. Australia levies a goods and services tax (GST) at a rate of ten per cent, collected at the point of sale. But the tax is not applied to imports …
Netflix et al should pay the tax. Charging tax on small imports is ridiculous. I don't but things online from overseas - at least almost never - so it wouldn't really affect me but it's just objectively a silly idea and, as the author rightly identifies, it's just to be seen to be doing something.
The similar VAT tax regime here varies between 17 and 27 percent (usually around 20). In the past it would have worked - the agent declares it for export and collects a VAT rebate. Nowdays - not so much, Eu if memory serves me right shares customs and excise data with Australia so the Aussies will get a nice manifest showing exactly how much the import is to be taxed at. So running it via Eu will result in either a bigger tax being collected or the relevant data being nicely tabulated and handed off to Australia for collecting GST.
In fact, the whole argument resembles the Eu arguments around VAT collection. It is not a matter of loss for the budget, it is a matter of heavily distorting competition by shipping untaxed Chinese tat with Ebay and Amazon being prime offenders. That tax SHOULD be collected as a anti-unfair competition measure even if it does not seem to break even financially - it creates local jobs and industry which are taxed in more way than just GST/VAT.
Now DumbTaxFuckistan, that is a different story. They do not know what tax did the neighboring village levy on the goods. Wake me up when they grow up to 19th century standards and introduce unified VAT (or GST).
Some of the big business, who coincidentally are big donors to both parties, have forced the government to do minimize competition with overseas seller.
For me, I'm happy to pay the extra 10% GST because I know that the price is still a whole-lot CHEAPER compared to the local prices.
In the UK they've had this for ages. Anything from outside the EU above a certain low level (much less than $1000 for most goods) has VAT and duty required to be paid. This is collected by the delivery companies who also add on their fee for paying this and then you are invoiced or the money is collected at your door.
It's a pain, the fee is quite high for lower value goods, but the money generally does get collected. International sellers know they have to put a customs declaration label on their goods and to mark the price down a little of borderline, however just putting gift or sample on the package can see the package opened and you pay more..
"Anything from outside the EU above a certain low level (much less than $1000 for most goods) has VAT and duty required to be paid." It's £35 in the UK.
Ebay, how hard is it? Purchase > $1000, customer in AUS, add 10% to sellers fee, send collected monies to AUS. Your sellers will quickly get the message that they should add tax to their prices.
As well as cnuts buying duck houses on expenses, tax does actually fund some stuff for the public good and if it's not on sales/purchases it will be on your earnings.
... isn't the GST - the cost of shipping small items exceeds this.
The real problems are twofold:
1. Geoblocking by multinationals like Panasonic, Sony and many others not to mention car companies, whose local prices are often double or even triple the price of the same item elsewhere.
2. Local companies that have managed to stitch up "sole supplier" deals with foreign companies, and who likewise jack up the local prices outrageously knowing that the original manufacturer won't sell indidividual items to retail buyers. A similar trick is a minimum order quantity of tens hundreds or thousands to protect these arrangements.
I have to agree with you here.
Two cases in point.
1. I needed a part for my car. It wasn't urgent, so I looked around. The cheapest I could get it was $310. Bought it from a US dealer and, including shipping, I paid $75, saving myself well over $200.
2. Wanted a couple of USB C cables for my phone. Officeworks and J B HiFi both wanted $40 each, Buying two certified cables on ebay came to $4 each including shipping.
Let's face it, it's not the GST we're trying to avoid, but rather the price gouging of the likes of Gerry Harvey.
"Geoblocking by multinationals like Panasonic, Sony and many others not to mention car companies, whose local prices are often double or even triple the price of the same item elsewhere"Replacement batteries for my Nikon camera are $140 in Australia, plus a stocking fee that I did not enquire the amount of. I purchase two for $AU10 post-paid from the USA. They were cheaper than from China.
3. Multiple local distributors each taking a cut.
Back in the Bad Old Days (tm) an item might be imported by an importer who sold it to a national distributor who sold it to a local distributor who sold to a wholesaler who broke down the palette and sold piecemeal to retailers who couldn't meet the local distributor's minimum order.
Before I get accused of stretching the truth, I am not making this up. This was the actual supply chain for an item. At each stage nark up was about 30%.
"Before I get accused of stretching the truth, I am not making this up. This was the actual supply chain for an item. At each stage nark up [I see what you did there!] was about 30%."It is even worse in Tasmania where an additional 30-40% is added because Bass Strait. Even quite nominal amounts of material cost significantly less when purchased from mainland suppliers.* When I replaced our dead TV last year, I purchased it from the mainland for ~$300 and it was delivered to my door. Purchasing the identical item from JB HiFi in Hobart was $50 more and still needed to be carted an additional 30 odd miles to my home. I didn't bother ascertaining what that would have cost.
* Amusingly Huon pine harvested in the valley where I live is cheaper to purchase from Victoria (hence two trips across Bass Strait) than it is locally.
"When I replaced our dead TV last year, I purchased it from the mainland for ~$300 and it was delivered to my door. Purchasing the identical item from JB HiFi in Hobart was $50 more and still needed to be carted an additional 30 odd miles to my home."
Don't feel picked on 'cause you live in Tassie, mate. I live in Adelaide. Last year I needed new tyres for a Landcruiser. Best price for what I wanted locally was $2800 for five if I picked them up and fitted them myself. I got them online from a mob in western Sydney for just under $2500 including freight and five steel rims ('cause apparently its safer to ship tyres mounted...)
"Don't feel picked on 'cause you live in Tassie, mate."Oh I don't feel in the least picked on. Imagine if you will a terrorist being told he had to go to Tasmania to wreak havoc.
"You really expect me to fly to Australia, catch a boat to Tasmania and then ride in a horse and cart to where you want me to blow things up? FFS..."
When I lived in Launceston (Tasmania), nearly 30 years ago. I was told by my local grocery store that peas where so expensive because of the cost of freight across Bass Straight. Which was odd as I knew they were grown about 5 miles away out towards Hagley.
We may (legitimately) question the fairness of imposing local sales tax on goods bought from places that are manifestly not local, or bought locally by non-citizens who will gain no benefit from said tax, but there is one absolutely massive advantage to imposing local sales taxes on everything sold within a given jurisdiction: it is very hard to evade, and loopholes are not that difficult to close.
We're all familiar with news about major multinationals avoiding tax on absolutely vast earnings, often by the most egregious means, such as different bits of the same corporate group "loaning" each other money and then charging unrealistic interest on the sums to effectively negate real profits and transfer P&L from one tax region to another. This behaviour is disgraceful, but the reason it can happen at all is because—
1. Some countries simply don't play fair on tax, and use it as a means of competing with others (as the UK has so shabbily threatened to do after Brexit)
2. Most countries have tax codes so insanely complex that no one, literally no one, fully understands it all any more. Complexity, as all good techies know, is a recipe for failure, because that's where things slip between cracks. In tech and engineering, it's Murphy's Law; in tax, it's Lawyers Law: they'll find a way to help rich clients avoid their social obligations, which is what it all comes down to. (And it does seem that the people who do this can still look in a mirror every morning, which suggests that some humans do indeed have no shame.)
A complex tax code is ripe for abuse. No sane person thinks complex tax codes are a good thing. Unfortunately, bureaucrats love their little empires of staff and budget and have no incentive to create and run simple, effective systems. And the complexity they create makes it harder for taxpayers to argue with them, so there's also the value of the "catholic" approach: speak incomprehensible dead languages, confuse the listener, and thereby evade responsibility for speaking simple (and challengeable) facts.
Sales tax, like property taxes, cuts through the crap. If DonoevilFruitBastardsCorp refuses to meet its obligations to the species on a $6.7tn turnover and $500m profit by avoiding taxes with transparently deceitful machinations, they can do this because complex tax laws allow it by providing loopholes—but they can be stopped dead in their tracks if governments simply insist on collecting a proportion of every sale to every citizen: end of.
My guess is that more countries will adopt a sales tax approach, which will spread rapidly as an antidote to multinational tax avoidance when politicians realise that the revenues rolling in speak louder than the brown envelopes*¹ previously offered by DonoevilFruitBastardsCorp's lobbyist reptiles.
*¹ Campaign contributions; fact-finding junkets in exotic locations; well-paid sinecures on the Board after the next election: you know the routine ....
Don't know if I am missing something here, but the Aussies have obviously been getting a good deal up to now as they have been doing this here in the UK for as long as I know. And as others have said it's a heck of a lot less than $1000, I'm talking about a few miserable quid, if memory serves it's around the £20 to £30 mark. When you see items on eBay from say the USA it has details there with the price and shipping about what you will pay in import doodie, obviously it's different with stuff in China as they don't make anything that costs as much as £30, ho ho, just joshing. I think the Chinese have gotten wise to this anyway and have 'fulfillment' centers in the UK full of their lovely tat, so you don't have to wait 6 weeks or pay tax. In fact wasn't the mandarins in the EU getting all upset about this (Chinese eBayer having UK fulfillment centers) as it is defrauding the EU of tax revenue or some such?
I think the limit is twenty pounds in the UK. My wife imports cheap jewellery from China bought via Ebay and sells it at car boot sales. We have packages arriving from China most days but it's very cheap stuff and we've never had to pay any duty. I did buy a CCTV system on Ebay last year, which also had a Chinese seller and was amazed to find it arrived next day tax free. That did indeed have a sending address at Heathrow. So yeah. It seems the money goes to China but the stock is held in the UK for fast delivery. On the other hand I was well upset when I bought a CD from the States a few years ago that was just over twenty pounds. The duty wasn't too bad at the usual 20% VAT if I recall correctly but the Post Office ripped me off for another eight pounds handling fee, which I think is borderline racketeering.
The gist is that the so called "logistical" solution costs a lot to set up and run. The ATO or customs or someone estimates that its around $60 an item to assess and collect the tax / duty and store and forward the goods. GST here is 10% so, being a pragmatic bunch downunder, we don't bother if its going to cost more than it pays. The original estimate was $100 per item because no one had any idea what it would really cost so they took a guess. Hence the $1000 limit.
In the UK there is a lower threshold because VAT is 20% and they charge an administrative fee to recover it. My understanding is this piecemeal VAT recovery is a net loss maker.
A massive expansion of the public sector to administer this is anathema to our conservative ruling party (confusingly named the Liberal Party but actually Tories). They would prefer to off load the collection on someone else. Hence trying to get foreign vendors to do it.
Basically, what we have here is theory and ideology bumping up against reality.
"A massive expansion of the public sector to administer this is anathema to our conservative ruling party (confusingly named the Liberal Party but actually Tories). "Not really. Both the ALP and the Liberal/National coalition are parties of the centre. The Liberal Party are not so much a conservative party as an anti-Labor party. It is true that the Left wing of the ALP is to the left of the Right wing of the Coalition. Most members of our national parliament are midway between the extremes with little to distinguish them from each other.
John Stone was Secretary to the Treasury from 1979 to 1984 and Senator for Queensland representing the National Party from 1987 to 1990. He was, to hear him speak, the driest of the dries. However, he doubled the number of staff while at Treasury.
"Ebay haven't insisted on Paypal exclusively for at least a couple of years. I don't think they ever did in Australia."They did. The rules change was made in 2010. If you are purchasing from a reputable supplier and thus do not need the PayPal warranty you're better off purchasing by bank deposit.
This will be a real headache for me if eBay go ahead with their threat. Despite the assertion of eBay being just a "Tat Bazaar", in reality they provide a convenient outlet for a lot of suppliers of tools, machinery and spare parts to conveniently sell to Australia. I have frequently used eBay to get tools, spares for agricultural machinery etc. Availability is much better than from local suppliers, prices are frequently much less than what's charged locally (even after paying postage) and, surprisingly, delivery is often faster.
Only a few weeks ago, I used eBay to source some (quite heavy) central heating components to do some much-needed repairs on my house and my daughter's house, from a UK supplier. The quality was excellent and the prices were less than half what local companies were charging. (Interestingly, some of the parts were made by an Australian manufacturer - work that one out!)
International outfits like eBay, Amazon etc. have well-organised processes for shipping large and heavy items across the world, so it would be a lot more difficult for me to buy locally and then ship the stuff myself. I don't mind paying an extra 10% for my imports, but it would be stupid for the government to make things so complicated that suppliers just stop sending to Australia. I do hope sense prevails and some sort of deal can be worked out.
What????? You mean you still have been buying that cheap crap from Harvey?
On a more realistic level, I cant see it making much difference to the end user - the price difference will still make it worthwhile.
Wife bought some New Zealand wool couple of weeks ago from a UK store - price was cheaper than getting it 1 hour down the road in Sydney! (Admittedly the postage costs from Sydney to our home was what made it more expensive to buy locally!)....
I don't like paying tax so I will stop my customers from using my services. The tax is payed by the buyer to seller not the service provider. The service provider is just acting as the middle man and taking a cut for offering the service. They are just collect just collecting the tax from the seller. Thus they have a service charge to cover their expenses . So their argument is hollow the tax is paid by the buyer to the seller who in turn is liable to pay the tax. As a shop keeper I had to collect and pay the GST in Australia the same as Sales tax is collected in most countries. It boils down to paying sales tax either in the selling State or in the buyers State/Country unless the seller is in a tax haven for dodging paying tax. Taxes and death are inescapable.
Me - Goes to shop that could reasonably be expected to sell ITEM. "Do you have ITEM?"
Shop - "What is an ITEM?"
Me - Shows diagram or picture, "One of these."
Shop - Looks at me like I am a bug squashed on the sole of their shoe. "There is no such thing as ITEM."
Me - "Yes there is. Could you order one in for me?"
Shop - "No. We only stock NOT-ITEM. You should buy NOT-ITEM as it is what we want to sell."
Me - "Sorry, I can't use NOT-ITEM for what I want to do with ITEM." Leaves shop, goes home (via several other shops with same result, if I am feeling particularly masochistic). Orders online. Has it a few days later.
Shop (to government) - Waaaaaaaaah. We can't compete in a free market by selling crap no-one actually wants to buy. Waaaaaaaaaaaah. Protect us from the evil foreners! Their supplying what the customer actually wants is unfair trade! Waaaaaaaaaaaah.
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