You Might Be Paying GST On Any Online Purchase Over $20 Real Soon

Ready to pay the GST on pretty much all of your online purchases? You may not have a choice: state Treasurers will be meeting with their Federal counterparts soon to vote on lowering the GST-free threshold on online purchases down from $1000 to $20.

According to a report in The Age, the Government will ask state Treasurers to vote on lowering the threshold on which GST is charged to online purchases from $1000 to $20, with a majority of them expected to vote yes.

The issue of lowering the GST-free threshold for online purchases has raged for years. Retailers like Gerry Harvey are always complaining about the "unfair advantage" overseas retailers have, given that their customers aren't slugged the extra 10 per cent on products under $1000.

A report by the Productivity Commission back in 2009 examined reducing the GST-free threshold on packages imported from overseas retailers and found that the move would actually cost more to enforce than it would actually collect in tax revenue. Today's report says that the Federal Treasurer Joe Hockey has identified a range of new technology that would make enforcing the GST-free threshold much cheaper (lol data retention).

The move to tax purchases over $20 and not $1000 would compliment the Government's strategy to tax digital purchases like apps, music, movies and international subscription services.

State Treasurers, along with Federal Treasurer Joe Hockey, will vote on the move on 21 August. [The Age]

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