[LINK] Kogan on Online Retail....

[Birch, Jim]

There seems to me to be a general conflation of two issues in this
discussion (here and elsewhere) between the performance of local
retailers and the economic case for GST on international purchases.  

I don't have much to add to the discussion of the performance of local
retailers.
 
As regards GST: it is a consumption tax applied to sales to the final
consumer.  I can't see a good reason for Australia to forgo tax revenues
on consumption that is purchased from overseas, particularly as this is
likely to increase over time.  I can't see any policy problem with this.
Can anyone?

There is, however, a practical problem in getting a collection process
that functions smoothly and effectively.  I'd guess that can be sorted
if the financial transfer is used as a tax point but I wouldn't know.  I
don't think 10% GST will stop people from purchasing goods at 50% of the
local price overseas, although it will swing marginal cases a bit.  I
bet Harvey Norman wants in addition to GST on foreign purchases, the
most obtuse and difficult tax collection scheme that can possibly be
constructed :)   

(There is a good economic reason for slanting taxation towards
consumption rather than productive investment.  OTOH flat rate taxes are
regressive since they are impact the poor to a greater relative degree,
but I think this can and should be mitigated elsewhere.)

Interwoven with the above there's also a third irrational "monkey brain"
issue of taxation in general: no one wants to pay tax.  However, we all
want to live in the amenity of high tax countries and no one wants to
move to places where tax rates are genuinely low, eg, Somalia. Enough
said on that one. :)

- Jim


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