A report in The Australian Financial Review on Monday last week quoted Adam Wand, head of public affairs for Visa, the global credit card company, saying it could not collect GST for purchases made by Australian shoppers online in response to a query from the Productivity Commission.
This is Visa telling the Australian Government that it will not act as a tax collector. If we retailers act as tax collectors, collecting GST from sales in our businesses, why not Visa? They can see where the purchase is being made and where the goods will be delivered.
I see this as an important issue as it could capture billions of dollars in additional revenue for the federal government. This revenue windfall would reduce pressure on Australian taxpayers, including newsagencies. It would also deliver a fairer playing field in terms of online versus bricks and mortar shopping.
It Visa was a good corporate citizen it would have responded differently to the request from the Productivity Commission.
Mark, adding GST to online orders is not going to help you or others to compete. When I can order a DVD from the U.K. that costs $45 here but is $18 including shipping the $1.80 extra for GST is not going to change a thing. The problems we have in this country is high rents and wage costs.
no scott the problem we have in this country is foreign aid…..
Never said it would Scott. All purchases in Australia should be under the sale tax regime. Online businesses the world over are getting a free kick. Visa should play its part as a tax collector.
Actually it’s quite unfair to blame Australian retailers and local wage conditions for the fact that bricks and mortar outlets are more expensive for consumers than overseas based online stores.
The reality is that overseas based manufacturers and distributors use market oriented pricing to set their export prices. That is they often set different prices for various countries. eg in many cases Australian importers or retailers are likely to paying more for goods than even consumers or retailers in other markets because the overseas exporter has been able to set a higher export price for Australia. In other words for many years Australians have been paying higher prices and effectively subsidising consumers in other markets. Traders in other markets can now operate on line and offer Australian consumers their local pricing advantage. Meaning Australians jump to the presumption that the local retailer has been ripping them off. It’s somewhat of a delusion because the consumer often spends the upfront saving on the expensive cost of single item shipping.
This trend will swing back as Australian importers pressure their overseas suppliers to supply at lower export prices. This combined with more efficient logistics and delivery (due to scale) will see Australian retailers regain significant competitiveness. This process would be greatly accelerated if there was a level playing field for GST. I cannot work out Bill SHorten’s attitude. he publically espouses an attitude that is almost anti-retailer, yet his personal support in the corporate world comes from a triumvirate of businesses in Logistics (Linfox), Retail (Lew) and Packaging (Visy). All of whom depend greatly on the health of the Australian retail industry. There are still a lot of issues to be played out here. This show is not over until the fat lady sings.