Why Australians could be about to get blocked from Ebay
EBAY has threatened to block Australians from using its platform if the government pushes ahead with its "unworkable" online GST changes.
Under new laws slated to come into effect from July 1, overseas businesses with an annual turnover of $75,000 or more will be required to register with the ATO to collect GST on all goods sold, including purchases under the current low-value threshold of $1000.
Treasurer Scott Morrison claims the changes are about ensuring Australian businesses "do not continue to be unfairly disadvantaged by the current GST exemption that applies to imports of low-value goods".
Major retailers including Harvey Norman and Premier Investments have long lobbied for the change, saying it will level the playing field against the likes of Amazon, Asos and eBay.
But in a scathing submission to a Senate inquiry, eBay has joined a growing chorus speaking out against the changes, describing it as a "hastily introduced", "counter-productive", "complex", "inconsistent" and "unworkable" bill that will "harm Australian consumers in many ways".
"Regrettably, the government's legislation may force eBay to prevent Australians from buying from foreign sellers," writes Jooman Park, eBay's vice president and managing director for Australia and New Zealand.
"No tax would be paid to Australia and none would be owed. It would raise no revenue, deny Australians access to choice and lessen price competition. This solution would not even represent a win for bricks and mortar retailers, because Australians would still find ways to buy online.
"They would do so direct via dotcoms without paying GST and they would lose the confidence they current enjoy buying from eBay with the advantage of its trusted seller ratings. This appears to be the most likely outcome at present."
If the bill is not withdrawn, eBay said, then "significant amendments" would be required "to even contemplate third-party online marketplaces somehow collecting GST given their current business models do not support it".
Echoing arguments by RMIT economists Sinclair Davidson and Chris Berg, eBay points out that the legislation "potentially deems eBay to be a 'seller' and an 'electronic distribution platform'" when it is neither.
"This is a fundamental misunderstanding of the marketplace: eBay is not a seller," Mr Park writes. "eBay does not own the goods, does not handle payments and it does not distribute anything. eBay is a third-party online marketplace that simply connects buyers and sellers.
"Perhaps there is confusion with other online marketplace-style business models. However, in those cases the online 'marketplace' is actually the real seller. Indeed, such first party marketplaces are no different to a retail shop, they hold and ship the goods, have large warehouses with stock and they handle the payments. eBay does none of this."
eBay said an online poll of 1000 Australians found 59 per cent did not support the bill as "it's unreasonable because eBay does not own, hold, sell or supply goods, rather it provides a marketplace for these transactions to occur".
"Under the current Australian proposal, tax liability changes depending on goods value; seller turnover; platform or direct sale; courier, postal company or repackaging business," Mr Park writes.
"A simpler alternative for an island nation is to work with the logistics companies. All parcels arrive at a small number of Customs points, via a small number of international logistics companies, one of which is government-owned.
"These companies can require buyers to declare whether a good is new and to nominate a value of the good as part of the pricing of parcel delivery to Australia. This system does not require parcels to be stopped, other than for routine auditing.
"It captures all goods, regardless of whether they were purchased via a platform or from a dot.com. It is practical and enforceable, raises genuine revenue and is fair. Unlike other proposals, this does level the playing field."
In a separate submission, Asos has also hit out against the changes. "We are concerned that if, complexity and uncertainty are not avoided, then compliance will be needlessly difficult which could have a negative impact on both the success of the legislation and the Australian consumer," writes Carly Cazzolli, Asos head of trading for Australia and New Zealand.
"There is too little time between the finalisation of the legislation and the proposed commencement date. It seems likely that the new legislation will not be finalised and enacted until May at the earliest, this only leaves one month to implement and test any required changes to both retailers' systems and those of any third parties involved in the supply chain."