Australian consumers, who too often pay a premium for digital content such as movies, television shows and music, are now facing another blow. The Australian government is proposing to extend the GST to cover media downloads from overseas companies, making services more expensive for consumers and collecting billions in extra tax revenue along the way.
As Fairfax Media reports, the new proposal, already dubbed the “Netflix tax” by some, would see a 10 percent increase in the price of iTunes purchases, as well as increases in the price of streaming services such as Netflix. Internet-based services such as Uber are also at risk of facing the GST.
Basically, if you’re getting content from an overseas provider, that company is now flagged to possibly face the GST, which would see its costs passed on to Aussie consumers.
Federal Treasurer Joe Hockey revealed the planned adjustment to the GST, which is likely to be part of next month’s federal budget.
“There are a number of those companies that are prepared to charge the GST on the services that they are putting into Australia, but they want to know that they are not at a competitive disadvantage. Now, the states agreed in principle that we should move in that regard,” Mr Hockey says.
As Mumbrella reports, News Corp Australia CEO Julian Clarke has said companies such as Netflix have created an “unlevel playing field” because they avoid paying GST.
“Netflix have just come into this country. They have been able to price themselves below the company that we have, which is Presto. But it’s not just us – it’s also the Fairfax joint venture with Nine (Stan),” Clarke told a Senate inquiry.
“We would be looking to Parliament to fix that problem. If the GST isn’t applied here and it allows a foreign company to come here and have a lower operating cost base then clearly it’s not a level playing field.”