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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.
Check out my sci-fi book "Lacuna" at http://goo.gl/MVxX8
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 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.
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
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.
Seriously, how naive can people get?
You have ZERO say in how your tax dollars are spent
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.