The other consideration in the above figures is tax. The Internet is not exempt. Transactions that take place on the Internet are subject to sales tax, customs, duties and excise. The issue is: how do
The other consideration in the above figures is tax. The Internet is not exempt. Transactions that take place on the Internet are subject to sales tax, customs, duties and excise. The issue is: how does the Government ensure that people pay tax on transactions that create little or no audit trail and take place between parties whose physical address is seldom disclosed. To put it simply, at the moment they cant.
The Australian Tax Office, in conjunction with the CSIRO has published a report on tax and e-commerce. The issues for the ATO include identifying the parties involved, accessing accurate records and dealing with jurisdictional issues. There is also a proposal to have transaction-related taxes, such as sales tax, collected automatically via the Internet, although this is not dealt with
in depth.
The big proposal is one involving a legislative framework whereby the ATO can, subject to privacy concerns being addressed, monitor Internet traffic with a view to detecting unreported commercial activity.
It is likely that this style of monitoring will become standard on the Internet.
When this happens is another question. With the speed that government wheels turn, its unlikely that the ATO will have legislation in place by the end of the year. For now, the problems of audit trails and unclear geography mean that tax avoidance is easy and enforcement a question of resources that the ATO doesnt have.
Duty is a tax that Customs can enforce. When a package comes into Australia, merchants are legally required to label it. If theres a clear invoice on the package, and the total is less than $1,000, customs will work out how much duty is payable and forward it to the local post office. Youll go to the post office, pay the duty and take your parcel. If theres no invoice, or the total is more than $1,000, youll have to go to the local customs office to sort it out.
So how much duty would you pay on imports? Here are the rates for, some
of the most likely things youd buy over the Internet. Books are free to bring in to Australia, youll pay 27 per cent duty on CDs, 27 per cent duty on software, and 31 per cent duty on clothes. There are over five thousand classifications in the Duty Tariff, so dont expect the same rates for all goods.
For further information on import duty, call Australia Customs on 1300 363 263.