Government reportedly proposes $5 tax on items Australians buy online from overseas

An alleged new government proposal is expected to lead to a higher cost of online shopping. Australians may possibly be hit with a $5 tax imposed on packages that contain items worth less than $1,000 sent from overseas. A proposal from the Department of Home Affairs would affect the majority or 90 percent of deliveries entering Australia.

Fairfax Media has reported about a discussion paper that revealed the news. The proposed tax will attract a number of purchases such as clothing, makeup and books as long as they are worth under $1,000.

A report from the Sydney Morning Herald states that the proposal will provoke opposition from online retailers such as Amazon and eBay.

The new tax will reportedly be designed to strengthen the country’s biosecurity budget, which has taken a hit since the exponential rise of online shopping across Australia. Up to 38.7 million packages under $1,000 were successfully sent to Australia from overseas in the last financial year. The number shows a 22 percent rise from the previous year; this rate is expected to grow.

The proposed tax will be independent of the ten percent GST for small online goods under the same amount that will come into effect later this year. The $5 internet shopping tax would mean a $200 million cash injection to the budget.

However, it could come at the expense of online shoppers. The news comes as consumers brace themselves for GST to be introduced on small online buys. Some experts are claiming that the tax combined with the GST would double the cost of some online buys.

The new tax proposal also comes as photo and video sharing social network Instagram extends its partnership with ecommerce provider BigCommerce to offer online shopping to Australian consumers. Aussie retailers now have another easy way to be seen by potential consumers who can then purchase their products. At the same time, consumers will have another platform where they can shop online.

Instagram shopping was launched in the United States in October 2017. BigCommerce merchants utilising the feature have seen a 50 percent rise in Instagram referral traffic to their site in the first five months, according to BigCommerce.

“Up to this point, social media platforms have predominantly been used by brands to generate awareness with current and prospective customers,” Business IT reports BigCommerce group product manager Jordan Sim as saying.