GST could apply to all online purchases: Hockey

Members of the small business community have welcomed a suggestion by Federal Treasurer Joe Hockey that all overseas online purchases could soon attract the goods and services tax.

Hockey has previously indicated his appetite for reforming the GST-free threshold, which currently stands at $1000.

But today the Treasurer went further and said the threshold “may well go to zero as well”, reports the ABC. 

“We are currently discussing the matter,” he said 

“It is something that the state treasurers and myself have been working on for more than 12 months.”

 Members of the government had flagged the idea of lowering the GST-free threshold to $20 but Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this afternoon “if you can do it at $20, you can do it at zero”.

Strong welcomed the Treasurer’s comments, saying “good on Joe Hockey”.

“You would spend more money administering it if it was at $20 so go to zero. It’s achievable and avoids any confusion or complexity,” Strong says.

Businesses that operate in the Australian book industry are also calling for the threshold to be scrapped completely. 

In a joint statement provided to SmartCompany, the Australian Booksellers Association, Australian Publishers Association, the Copyright Agency and the Australian Society of Authors teamed up with COSBOA to back the push to apply GST to all offshore online purchases.

“This is about ending an era of protectionism for offshore businesses – large and small,” said Joel Becker, chief executive of the Australian Booksellers Association.

“While hundreds of thousands of us collect and pay our fair share of GST, governments continue to protect off-shore businesses who do not pay tax, do not employ Australians, and therefore do not contribute to Australia’s hospitals, schools, roads and other essential services.”

“As the government now points out, new technologies have reduced the cost of collection of this revenue, and whether it is an impost at point of purchase on credit cards, or asking the Australian Tax Office to target the top 50-100 internet retail providers, there are cost-effective if not cost neutral ways of collecting the revenue,” Becker added