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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.
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.
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.
Seriously, how naive can people get?
You have ZERO say in how your tax dollars are spent