There is much debate globally about taxing on line sales and no more recent than the treasurers ( Federal & States ) meeting this last week in Australia to look at the GST for on line sales with a view to cutting back the $1,000 GST free threshold on imports. As was noted by the Grattan Institute following the announcement and politics aside, the economic impact/benefit of lowering the $1,000 threshold does not appear to be a worthwhile exercise. Not at this stage anyway.
According to the Grattan Institute, Treasury estimates suggest a loss of $650 million in revenue in 2013, growing to $860 million in 2016 is not going to deliver a meaningful result. While making changes to achieve such savings are desirable, in context they would appear to be small in light of the overall budgetary savings that need to be achieved. The Institute suggests that the focus should be on more effective strategies that will yield greater economic benefits given that the budgetary hole is circa $60 billion. This argument is given further credibility when the savings noted by Treasury don’t take in to account collection costs. The debate is heading towards broadening the GST base which will yield far greater results even after providing certain safety nets to protect those sectors of the community that would be adversely impacted .