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Australia: Your Digital Games (and Movies!) Could Be About to Jump In Price
dotarray writes with a snippet of news from Australia about expanded taxation for digital goods. From Player Attack comes the gist: Australians really are about to start paying more for digital services — including Steam games — as Federal Treasurer Joe Hockey has confirmed plans to introduce a 'Netflix tax' in this week's Federal Budget. As mentioned last week, this is not a new tax, but an extension of Australia's current Goods and Services Tax to include digital services, adding 10% to virtual items and services purchased online. Details have not yet been revealed, but potential services include not only Steam games but also Netflix subscriptions and even Uber trips.
Wouldn't Uber trips be subject to service tax anyway - it's not like they give you a virtual taxi ride?
It makes no sense at all if Uber isn't collecting GST. The GST is essentially a value-add tax applied to all domestic sales of goods or services. It doesn't apply to hobbies, exports, and personal imports up to a certain value. But I can't see any way Uber should be exempt from GST. It's clearly provision of a service for money, and hence subject to GST. Yet another way these goons think they can just avoid the law.
I would support this if the government:
1. Pursued these companies for company tax, not just make them pass on GST from our pockets.
2. More funding to the ACCC to make these companies actually stick to Australian Consumer Laws (i.e. Sony PSN & Steam)
3. Do something about the price disparity to overseas that can not be reasonably be explained by the tax, shipping, costs to do business in Australia, etc.
But knowing this government, it will just be another hairbrain implementation that hurts anyone who is not a middle/upper-class baby-boomer.
That's great news!
Because every Australian I have ever talked to has complained about not paying enough for digital music, digital games, and digital movies.
It's like the Australian government commissioned a bunch focus groups, attached electrodes to people's brains, read their minds, and did the exact opposite of what everybody wanted.
Yes! (in theory)
See, the introduction of the GST was to coincide with the bundling of a bunch of other taxes into one. For some goods, most notably electronics and "luxury items", they actually got cheaper. This was because it's truly a stealth tax on the poor, by taxing commodities like bread and orange juice (which previously would have been taxed at lower rates or even subsidized), and lowering the tax on luxury goods to only 10% (where they would have previously commanded much higher taxes).
So, of course, it's possible that Steam games and Netflix and other such things are about to get a whole lot cheaper. After all, most software is more expensive here; in some cases this is simply because "it's what the market will pay" (read: foreign companies gouging us for our high quality of life), but in some others, it's because of taxes. So in theory, prices could actually drop.
In theory.
It won't actually happen, because our economy is roaring along thanks to the mining boom, and the powers-that-be want to slow it down a bit and rake in some of the dough while the going's good.
Besides. That election promise is so many governments ago nobody gives a fuck anymore, but it's nice to dream. Dream the fevered dream of a madman; that taxes will even once go down, and that Australia might, one day, pay "only" as much +10% of digital products as the US, UK, and other places.
One day...
One day.
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Not quite. Digital services are already taxed. The tax is being extended to digital services provided from offshore, because Netflix have discovered they can skirt the current tax provisions by having no footprint in Australia and hosting entirely offshore. As the monthly fee falls below the threshold at which personal goods are normally exempt from taxation on import (as it's not worthwhile to collect it) they can charge no tax. However the existing rivals
(eg Quickflix) do have an on-shore presence and so have to charge their customers tax, creating a distinctly unlevel playing field.
I expect New Zealand to follow suit shortly as the same issue is present there.
And how is this going to make pirate bay more expensive?????
" the powers-that-be want to slow it down a bit and rake in some of the dough while the going's good."
What's wrong with that? If you don't, it will end in accelerating inflation and a balance of payments crisis.
I'm on the fence on this issue.
One the one side we have the principle of the GST being a universal tax that is supposed to be equal across the board. Dare I say I actually agree with the government that it's unfair on local businesses that purchasing the goods overseas can be tax free (for goods under $1000, everything else was subject to import duties and GST anyway).
But on the flip side I see this as another incredible amount of bureaucratic red tape that will result in more expensive goods (not from tax but from cost of compliance). Think back to the EU and businesses which need to track whether they are selling things in the UK or in the rest of the EU so they can apply VAT as appropriate. How are people going to manage this?
Tax away! Just like Europe, woo-hoo! Kick those games-addicted nerds in the teeth and shit down their throats! And then use the tax money to fund the Australian Firewall! Yee-haw!
Well, It looks like our piracy rates are about to jump again then too.
And how are they going to collect this GST from overseas companies?
There's no way to ensure that every mom and pop online business selling digital media/games over the Net into Australia will comply with a "request" from the Aussie government (because they have no legal power to force them) to collect GST on their behalf for free.
Will they be asking credit card companies to automatically levy the GST on overseas purchases? If they do then they're opening a pandora's box that they really ought to keep closed.
I could see Bitcoin getting a new lease of life for Aussies :-)
The shop down the road can't avoid sales tax.
The online shop based in Australia can't avoid sales tax.
The online shop based outside Australia can avoid sales tax.
This puts Australian businesses at a disadvantage, i.e., the tax regime fucks your own people.
So the choices are:
* level the playing field by abolishing sales taxes (the market fundamentalist/tax haven model)
* level the playing field by requiring individuals to declare and pay the sales tax (the US model)
* level the playing field by requiring foreign companies to collect and pay tax
Most governments go for the latter.
I just sold a house. The price difference is less than the mortgage interest and other costs over 10 years. So. I just got kicked in the teeth by CGT, a tax which they promised to kill when the GST came in.
With many people buying online the local shops have gotten into a real tizzy. Slight problem though. Some things you just can not buy in Australia. They can be purchased and shipped from the US or Canada or India and then we get slugged with GST on top of shipping. WTF. Seriously, why.
It's the natural thing for those down under to pay more. What is the problem? Nature? World order? It's all in balance.
What I would really want is the ability to say where I want my tax money to go to.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
... virtual items and services purchased off-shore. FTFY
The 'Australia tax', geo-blocking, data retention and speculative invoicing (of copyright pirates), censorship firewall; now a sales tax acting as import duty on off-shore digital services: All reasons to buy an off-shore VPN service.
"Australians really are about to start paying more for digital services " they already pay more because it cost a horrendous amount of money to shift bit through the ocean apparently.
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What I would really want is the ability to say where I want my tax money to go to.
You already have that ability, it's called an election.
sigs are hazardous to your health
I would like to know if GST is collected on services purchased from overseas - but services of the sort that big companies buy? So, if an Aussie company pays $100K to an Indian web development company, is GST collected? Are the little guys paying and the top end are not?
You already have that ability, it's called an election.
Hahahah - you crack me up. They decide after the election how to misspend our tax dollars.
"Latter" compares two things. Perhaps you meant "last"?
Il n'y a pas de Planet B.
Gonna skyrocket.
Seriously, how naive can people get?
You have ZERO say in how your tax dollars are spent
The latterest.
They always need just a little bit more, don't they.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Your frame of reference is the US, I presume. Just because your system is dysfunctional that doesn't mean that all democracies are. It could be because you have so many voters per representative that your system works substantially worse than in smaller countries where a smaller number of voters can decide the fate of a representative that seems too prone to be swayed by lobbying money. That is my main concern with European integration since whilst I do advocate one federal EU state, I'm concerned about how it will change the voters per representative balance. Will we end up dysfunctional like the US? I certainly don't want that. Extreme transparency like in the Nordic countries is a necessity and very clear rules for lobbying.
Unlike the US, gift cards in Aus all expire. Most only last 12Months.
Gst is not paid when they are purchased but when they are used.
When they expire no Gst is paid by the company that pockets your money because no goods or services have been sold.
Sure they pay company tax on the 100% profit margin but no gst as they would if the card was used. If this was the case then more tax would be paid.
This circumvention was brought to you today by the letters:
V, P, and N
READY.
PRINT ""+-0
If he wants to bring in some fucking revenue, END NEGATIVE GEARING.
For foreigners who don't understand, you can buy a second, third, fourth, nineteenth goddamned house and can claim the interest repayments, renovations, real estate management fees, maintenance etc against your taxable income.
They claim this 'encourages low cost rentals' and housing to be built by the rich for the renters.
Statistics show the VAST majority of negative gearing boffins actually buy in well established areas because they are worth more money (of course) and will appreciate in value.
They get interest only loans and bank on the "fact" that housing should double in value every 7 years (incomes sure don't though)
What negative gearing actually does is artificially drive investors (ie: rich people) to offload cash into homes, turning the "aussie dream" of owning a home far more difficult for those who can't afford to compete with the rich, trying to reduce their tax.
Furthermore we are also welcome with wide wide open arms, foreign investment into property here, it's not good for the economy, it's good for a miniscule fraction of the population, it's driving the average price up also.
Long story short, me, you and any other Aussie tax payer reading this are literally paying for rich peoples homes, when you explain this to most foreigners they are baffled as fuck "wait, a tax break for people with SECOND homes and THIRD? what about a tax break for people getting their first" ...
It's fucking nuts, disgusting.
Just ask those in WA.
Took the words right out of my mouth. Democracy isn't perfect, but it sure as he'll beats the alternatives.
And yes, I too support this change. I support level playing fields that don't place my potential employers at a disadvantage, and I like (most of) the infrastructure that it pays for.
But people keep voting for government to take more and more of their money and to control their life even more - why because think think CAPITALISM is EVIL and only an ALL POWERFUL and ALL KNOWING god (I mean GOVERNMENT) can make things better.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
A tax on a commodity focuses that tax on a subset of income--you spend what you make--thus magnifying the tax. If, for example, 2% of all pre-tax income in Australia was spent on Netflix, then a Netflix tax of 10% would translate to an income tax hike of 0.2% across the board; if it were focused on high-income earners, it would affect only the small part of society at a rate almost identical (e.g. the top 50% have 87.25% of the money, 0.2% becomes 0.229%; the top 25% have 67.38%, income tax hike of 0.2968%).
A tax on a commodity also focuses on buyers. Let's say everyone buys the maximum amount of liquor, taxed at $14 per liter of pure alcohol. Rich people die of alcohol poisoning just as fast as poor people, so it's the same amount of alcohol; yet rich people have more money, so it's a smaller portion of their income. If poor people spend 10% of their income on alcohol and pay 0.5% of their income in alcohol tax, and rich people with 100 times the income buy just as much, then rich people will spend 0.1% of their income on alcohol and pay 0.005% of their income in alcohol tax.
We can surmise the rich won't spend proportionally precisely as much (or more) of their income on digital media as the poor do. They might spend two or ten times as much, and so any person with income over $1M would be taxed a lower percentage of their income by the media tax than a a person owning $100k.
Combining these two things, we see that all commodity taxes target lower-income earners with much higher income-relative tax rates than they target high-income earners, and they make those tax rates on the commodity extremely high by having to multiply them by the proportion of spending relative to the income spent on the commodity in order to derive the same income-relative tax. This means the commodity tax is a high proportion of the commodity's cost, greatly raising the price of the commodity, while also most greatly impacting the least-affluent of the market purchasing that commodity.
Taxing the shit out of the poor increases labor cost to businesses, making a transition to automation and a reduction of human labor exploitation more accessible. Simply put, raising taxes on the poor leads to unemployment, to the poor being even more poor and to more of the poor being jobless. Taxes should be kept small and either flat or progressive.
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This is what happens in a country that takes their citizens right to bear arms away. Higher taxes to better support government bloat is first, next it will be further intrusion into personal lives and jailing people without due process. At some point Australians will be slaves to their government and they won't even know it.....
I know what you are thinking; that's all happening in the US too. At least here in the US we will be able to gather our guns and shut it down when we get tired of it.
You could run. Once you're in, you just have to figure out how to pay for things the civilization wants. Like roads, bridges and schools. Or you could just shirk that responsibility and pander to whatever interests you need to in order to keep your job for another election cycle. Humans are bad at planning for long-term abstract threats. That's why we have governments. But planning for those long term abstract threats is a great way to be unpopular in government, and will likely get you kicked out after one or two terms. Isn't that just delicious?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
That may be true... but a 10% increase in price of 0$ is still 0$.
Capitalism is worse than government.
The government has been bought by "capitalists" and has forgotten their constitutional duties and responsibilities
Then take back the government. Here's where you can team up with laissez-faire capitalists and libertarians and take back the government. AND maybe learn a lesson that giving more and more power to the government means, in practice, making you more and more powerless.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
Steam switched to "NZ" dollars just before PC GTA V came out. Hence I haven't bought it from Steam. It is NZ$92.
Being NZ this seems to comprise:
- US component of US$60
- NZ dollar conversion: NZ$75
- NZ GST on $75 = $86
- Approx 10% sledge up just..because = $94
My forumla seems to approximately apply. I subscribe to a proxy for US Netflix. I cant seem to work around the Steam thing. It would appear some sites like Netflix turn a blind eye to proxies.
I haven't bought GTA V. I don't want it *that* much.
In post Patriot Act America, the library books scan you.
I have already cut back on my games, just because it requires an internet connection even for games where it shouldn't, or that it requires Steam, but I hate Steam.
As for the price, I measure the value of the game with a simple formula. For every dollar I spend, I should get at least 1 hour of enjoyment out of it. If I spend 60 dollars, I should enjoy it for at least 60 hours of game time.
Latter selects the last item from a previous list. Often the list is two items, but in this case there are three. Latter is stylistically and technically correct, whereas latest would be an inferior choice to the word last. But latter works admirably.
The online shop based in Australia can't avoid sales tax.
The online shop based outside Australia can avoid sales tax.
Not so simple. It is more if it is posted from overseas there is no tax. Many local companies have overseas subsidiaries that ship from Asia and do not collect GST. More expensive items (currently over $1000) will be taxed on arrival by customs.
Goods sent from overseas have the disadvantage of higher shipping cost and/or much longer delivery times, as well as loss of warranty (or expensive return shipping). So the scope is limited. It will never be like Amazon killing off local businesses in the US.
And when people order online, they expect to save a _lot_ more than the 10% GST.
You can avoid these taxes if you use a VPN. It can be risky if you arent smart about it. There are certain steps, a guide* which you need to take before you take this step.
*http://www.bestvpnprovider.com/how-to-avoid-steam-tax-in-australia/
As mentioned last week, this is not a new tax, but an extension of Australia's current Goods and Services Tax to include digital services, adding 10% to virtual items and services purchased online.
So it's a new tax.
So cute and naive.
The new are bought as fast the current
America isn't really a representative republic (it was NEVER a democracy) anymore, it's a plutocracy
No. It never was a Democracy. You know just a few weeks ago I was castigated by other /.ers for saying that the US was never a Democracy. Democracy is antithetical to individual freedom.
It's becoming less and less of a representative republic because we are disempowering the individual (in the name of the greater good) and wondering why there are no checks and balances.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
The bigger joke is whenever a president, or sec. of state, or whatever position of power goes out and preaches about how great America is because "It's a democracy!" when it isn't
Corporations are worse than government, because there's not even the pretense of helping the citizens, it's all about the greed.
I think of government as bloated corporations with guns, jails and the force of law behind them.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond