Implications of Online Shopping Tax in Australia
Added on 2023-05-28
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IMPLICATIONS OF ONLINE SHOPPING TAX IN AUSTRALIA 1
IMPLICATIONS OF ONLINE SHOPPING TAX IN AUSTRALIA
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IMPLICATIONS OF ONLINE SHOPPING TAX IN AUSTRALIA
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IMPLICATIONS OF ONLINE SHOPPING TAX IN AUSTRALIA 2
Question1
Summary of the article
The article generally highlights the introduced online shopping tax by the government of
Australia and its impacts both to consumers and the retailers (both the national and multinational
retailers). Turnbull’s online shopping tax in Australia was introduced majorly to collect tax on
imports. It’s more of import duties. The government of Australia stated that imports less than
$1000 should be taxed. The tax collected on these imports should be worth 10 per cent goods and
service tax (GST) (Stafford and Turan 2011, p.343). The online tax should be collected by the
online platforms themselves and thereafter the platforms should pass it to the government. The
government of Australia claimed that the online shopping tax was necessary to increase tax base
in Australia and hence raise more revenue for government expenditure on various sectors of the
economy of Australia. Most of these sectors are social amenities such as schools and hospitals
among others. The estimated revenue to be raised from the online platforms is $300 million.
Turnbull’s online shopping tax has various consequences both to Australian consumers and
retailers. The government of Australia in introducing its online shopping tax did not consider its
cost to living standards of many Australians who are middle income earners. The tax put more
pressure to Australian consumers by raising the price of goods and services. The burden of the
introduced online shopping tax was passed to the final consumer and this led to increase in
online prices for goods and services on Australian sites as compared to those in overseas sites
(Jiang, Yang and Jun 2013, p.191). For example the favorite Unicomp Ultra Classic Keyboard is
sold $139 at the official Amazon site (Amazon.com) but it sold at an increased price of $360 at
the Amazon Australian website (Amazon.com.au). Also handbag of Marc Jacobs Jane West End
Question1
Summary of the article
The article generally highlights the introduced online shopping tax by the government of
Australia and its impacts both to consumers and the retailers (both the national and multinational
retailers). Turnbull’s online shopping tax in Australia was introduced majorly to collect tax on
imports. It’s more of import duties. The government of Australia stated that imports less than
$1000 should be taxed. The tax collected on these imports should be worth 10 per cent goods and
service tax (GST) (Stafford and Turan 2011, p.343). The online tax should be collected by the
online platforms themselves and thereafter the platforms should pass it to the government. The
government of Australia claimed that the online shopping tax was necessary to increase tax base
in Australia and hence raise more revenue for government expenditure on various sectors of the
economy of Australia. Most of these sectors are social amenities such as schools and hospitals
among others. The estimated revenue to be raised from the online platforms is $300 million.
Turnbull’s online shopping tax has various consequences both to Australian consumers and
retailers. The government of Australia in introducing its online shopping tax did not consider its
cost to living standards of many Australians who are middle income earners. The tax put more
pressure to Australian consumers by raising the price of goods and services. The burden of the
introduced online shopping tax was passed to the final consumer and this led to increase in
online prices for goods and services on Australian sites as compared to those in overseas sites
(Jiang, Yang and Jun 2013, p.191). For example the favorite Unicomp Ultra Classic Keyboard is
sold $139 at the official Amazon site (Amazon.com) but it sold at an increased price of $360 at
the Amazon Australian website (Amazon.com.au). Also handbag of Marc Jacobs Jane West End
IMPLICATIONS OF ONLINE SHOPPING TAX IN AUSTRALIA 3
Suede is sold at $894 on the Amazon official site but the same is sold at an increased price of
$894 at the Amazon Australian site. This shows that the introduced online shopping tax in
Australia has increased price of goods and services in Australian sites as compared to those of
other sites overseas. Also small amounts of goods and services are availed at the Australian sites
as compared to a variety of goods and services availed at overseas sites (Cicchetti and Freeman
2011, p.528). For instance the Amazon offers a wide range of goods and services (more than 500
million) at its American official website while it offers only small amount of goods and services
at its Australian website. This shows that the introduced online shopping tax by the government
of Australia punishes the Australian consumers through the hiked prices of only small quantities
of goods and services offered at Australian sites as argued by the Australian Taxpayers’
Alliance. It would be fair if the Australian government also considered increasing the minimum
wage rates of its working population to match the hiked prices of commodities.
Also the introduced online shopping tax in Australian highly disadvantages its retailers. The
Australian retailers have been made less competitive. This is due to the fact that they have been
forced to sell their goods and services at high prices to cater for the tax and other expenses. Some
of the expenses which contribute much towards the increased price of commodities offered by
the Australian retailers include increased electricity fees, zoning laws, authoritative labor
regulations and red tape (excessive regulation). Australian consumers end up purchasing cheaper
goods and services from overseas sites such as Amazon who tend to compete out the Australian
retailers as they pay fair tax compared to the Australian retailers. In a nutshell, the introduced
online shopping tax highly disadvantages the Australian consumers and retailers and its
implementation will eventually force many Australian retailers to exit the market.
Suede is sold at $894 on the Amazon official site but the same is sold at an increased price of
$894 at the Amazon Australian site. This shows that the introduced online shopping tax in
Australia has increased price of goods and services in Australian sites as compared to those of
other sites overseas. Also small amounts of goods and services are availed at the Australian sites
as compared to a variety of goods and services availed at overseas sites (Cicchetti and Freeman
2011, p.528). For instance the Amazon offers a wide range of goods and services (more than 500
million) at its American official website while it offers only small amount of goods and services
at its Australian website. This shows that the introduced online shopping tax by the government
of Australia punishes the Australian consumers through the hiked prices of only small quantities
of goods and services offered at Australian sites as argued by the Australian Taxpayers’
Alliance. It would be fair if the Australian government also considered increasing the minimum
wage rates of its working population to match the hiked prices of commodities.
Also the introduced online shopping tax in Australian highly disadvantages its retailers. The
Australian retailers have been made less competitive. This is due to the fact that they have been
forced to sell their goods and services at high prices to cater for the tax and other expenses. Some
of the expenses which contribute much towards the increased price of commodities offered by
the Australian retailers include increased electricity fees, zoning laws, authoritative labor
regulations and red tape (excessive regulation). Australian consumers end up purchasing cheaper
goods and services from overseas sites such as Amazon who tend to compete out the Australian
retailers as they pay fair tax compared to the Australian retailers. In a nutshell, the introduced
online shopping tax highly disadvantages the Australian consumers and retailers and its
implementation will eventually force many Australian retailers to exit the market.
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