[LINK] No dead cats please
lib.michael at gmail.com
Wed Feb 22 06:43:16 AEDT 2017
When Netflix Australia began they refused to collect GST saying they were
not an Australian entity. Their pricing was 10% below the other streamers.
Does anyone know if this is still the case?
On Wed, Feb 22, 2017 at 1:07 AM, Stephen Loosley <stephenloosley at outlook.com
> If governments are serious about transforming the public sector,
> parliaments are going to have to stop throwing dead cats, like Scott
> Morrison’s new overseas GST bill, over the wall. They create a spaghetti of
> bespoke business rules that need more bureaucrats, not less, to maintain.
> By Tom Burton .. http://www.themandarin.com.au/
> Yet another dead cat is about to be thrown over the wall.
> One of the most frustrating parts of being a public servant is when a
> minister and the parliament decide to handball a tricky political problem
> to the bureaucracy to fix. The fix inevitably needs a complicated
> regulatory patchover and painful execution and resourcing issues to sort
> The poster child example in recent times was when then-communications
> minister Stephen Conroy decided Australia needed to filter the internet to
> protect us against baddies and pornographers. Whatever the virtue of the
> idea, the complexity of systems and compliance processes that would have
> been needed to come up with anything near effective was nightmarish.
> In regulator land this is known as the dead cat option, and this week we
> have a live example with Treasurer Scott Morrison introducing a bill to
> remove the GST concession for low value goods bought offshore.
> The big local retailers led by Gerry Harvey have been pushing for years to
> close down the concession, claiming they want a level playing field with
> overseas retailers.
> A concession has existed for decades for goods worth less than $1000, as
> an administrative device to save Customs (now Border Force) the cost of
> having to collect duty and GST on low value transactions. These
> transactions were typically one off purchases by returning travellers —
> cameras, portable electronic devices and perfumes.
> With the cost of collection for goods under $1000 typically more than the
> revenue to be gained the concession was a neat (and popular) fix.
> Along comes the internet and with it the huge rise in offshore online
> purchases — much of it driven by the inexplicable, significantly higher
> cost of buying exactly the same goods locally.
> For many years the Canberra econocrats resisted changing the concession,
> arguing it was helping competition in Australia’s notoriously oligopolistic
> retail sector.
> It was also noted that no major economy seeks to collect revenue on small
> value transactions, because of the complexity of collecting and enforcing
> value-add taxes in external markets.
> The cost of collection has slowly been coming down and is now estimated at
> around $60 a transaction. This means that, given a GST of 10%, the
> government will actually lose money on transactions of less than $600. The
> average value of internet purchases is estimated to be around $100, but the
> mode, or most frequent purchase, is around $10. For millennials, buying
> overseas online is second nature. In my own house a tiny parcel, usually
> containing an obscure piece of micro computing, arrives every other day.
> It was this math that recently prompted the US to actually lift the de
> minimis level from $200 to $800.
> But in Australia, Harvey and the big retailers finally convinced
> then-treasurer Joe Hockey and the states to go the other way.
> The measure was announced in last year’s May election budget and yesterday
> the ever-assertive Treasurer Scott Morrison proudly introduced the bill. It
> requires all offshore retailers and/or their re-deliverers who sell
> anything to an Australian to register for GST and to remit it to the ATO.
> The measure will raise $130 million a year once underway. Morrison claimed
> it as a world first. He’s right, no country, even with the encouragement of
> the OECD, has tried to levy a GST on foreign retailers of goods by
> registering those businesses in their tax system.
> For a government that wants to reduce bureaucracy, the bill is a red tape
> nightmare, with 31 pages of impenetrable amendments. If the devil is in the
> detail it will defy any intelligent parliamentary scrutiny. Bring back John
> Faulkner, a senator who got across the detail at forensic level.
> The bill seeks to target the big e-commerce platforms — Amazon, eBay and
> the looming monster of them all, the Chinese Alibaba. How willing they will
> be to reprogram their business systems and accounting processes to collect
> sales tax for the Australian government is to be seen.
> In the case of eBay it will be particularly problematic. eBay is an on
> line bazaar, linking buyers and sellers, but is not a payment platform.
> Each retailer collects direct from the buyer, which means a Lahore-based
> online shop selling phone charging cords for $8 will need to register with
> the Australian Tax Office and send through the 80 cents when ever they sell
> to an Aussie. Good luck with that one.
> If they sell through eBay it will be eBay’s responsibility to identify who
> the end consumer is in Australia, calculate the tax payable, remit the tax
> to the ATO and presumably collect that amount from the online shop. I doubt
> eBay wants to be a tax collector for 100 governments so I think some lucky
> lobbyist is about to get real busy.
> If the retailer sells less than $75,000 a year to Australians they will be
> exempt from the GST, as are Australian retailers, but not if the sale
> occurs through the e-commerce platform. How all of that is to be tracked
> and enforced is anyone’s guess.
> And good luck to the comptroller of customs, whose agency will be vetting
> these goods as they stream into the country.
> A true dead cat.
> The world will be watching Australia’s move. Don’t be surprised if they
> are saying if Australia can collect sales tax off their retailers, we will
> This means the many Australian online retailers targeting offshore markets
> could quickly find themselves also being required to register and pay sales
> tax to a myriad of jurisdictions. Good times for the local accountants.
> Many of the complexities and high costs of public administration come from
> having to string together schemes like this. Over time even more complexity
> and cost are typically laid into the system, supported by a web of IT and
> other bureaucratic processes.
> As a result, much of government is riddled with back office complexity.
> This is the elephant in the room as government seeks to transform its
> services into fast, easy to use and intelligent services. Efficiently.
> The cost of maintaining this spaghetti of bespoke business rules is huge.
> Witness the one billion dollar price tag to modernise the welfare payment
> If governments are serious about transforming the public sector to be
> relevant in the digital era, then parliaments are going to have to stop
> throwing dead cats, like Morrison’s overseas GST bill, over the wall.
> Link mailing list
> Link at mailman.anu.edu.au
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