Online bargains from China set to cost more for Australia residents with new tax
Australia will levy a 10 per cent goods and services tax from next July on imported items costing less than A$1,000, with Chinese e-commerce platforms likely to see the biggest impact
Chinese e-commerce platforms could be among the most affected by an Australian government decision to impose a 10 per cent goods and services tax on low-priced products bought online from overseas merchants.
Currently goods imported from overseas that are priced below A$1,000 (US$760) are exempt from GST, but from July 1, 2018, Australian residents will have to pay an extra 10 per cent for most types of products, regardless of their value.
The new rule aims to bring about fair competition for Australian merchants, who have been hit by cheaper imports on which duty is not paid, said Kate Roff, an Australian tax official who is in Shenzhen as part of a roadshow to explain the policy. An extra A$300 million is estimated to flow into the government’s coffers in the first three years of the policy, she said.
China will be among the biggest countries to be hit, with an estimated over 500 online platforms, merchandisers and shipping companies potentially affected, followed by Singapore, Japan and Malaysia, according to Australian government figures.
For Zhu Renxin, a director of a Foshan, China-based trading company that sells bags worldwide through global e-commerce platforms including Amazon and eBay, the new rule could mean that he would have to put up prices for shoppers in Australia by more than 10 per cent because of other costs associated with the change.
“We will have to hire professional tax consultants to help us deal with the local Australian tax rules, and probably some other related disbursements, which will also be added to the prices that local consumers will eventually have to pay,” Zhu said.