eBay threat to block Australian customers

eBay threat to block Australian customers
eBay has told the Federal Government it might geoblock Australian customers if it goes ahead with its “Amazon tax”  hitting online shoppers with the 10 per cent GST on all purchases from July 1.

eBay, along with companies like Amazon, have been lobbying against the tax saying it’s unworkable.

In eBay’s submission to the Senate inquiry into the proposed tax, the online retailer’s Australia and New Zealand vice-president Jooman Park threatened to geoblock Australian customers if the tax was put in place.

“Regrettably, the government’s legislation may force eBay to prevent Australians from buying from foreign sellers. 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,” the submission said.

“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 dot.coms 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,” he said.

eBay said it would take “several years” to develop systems that would comply with the new laws but the cost of introducing these new system changes would probably be to too high.

As a result, it said geoblocking exports to Australia was the easier option.

“A far more likely scenario is that the costs of compliance for one single country will outway [sic] any possible benefits for these internationally operating marketplaces and it will, therefore, be less harmful to block imports altogether,” the company said.

It said introducing a system as complex as the GST “completely ignores the way third party online marketplaces function”.

“Compliance with GST collection and remittance rules will require a very significant investment of human and financial resources in product development and administration,” eBay said.

Big local retailers led by Gerry Harvey have been leading the push for years to change Australia’s tax laws that see imports of physical goods such as cosmetics, clothing, books, cameras and portable electronic devices worth less than $1000 going GST-free.

The proposed new tax follows the introduction of the so-called “Netflix tax” which slaps the GST on digital products such as movies, games, apps and e-books bought from overseas retailers like Netflix and Apple from July this year.

 



An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.