One of the internet’s worst fears has come to pass as the Australian government has found a way to bring taxes into the digital age.
Confirmed by Australian federal treasurer Joe Hockey today, a new tax on ‘intangible’ digitally imported goods will be introduced in the 2015 budget.
Dubbed the ‘Netflix tax’, the tax will be imposed on companies selling digital goods or services into Australia from abroad.
While details on what companies this new tax law will target have yet to be released, it would certainly mean a 10% increase on Steam prices in the future. It also remains to be seen whether this will effect other online digital purchases like the Playstation Network.
“It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST,” the treasurer said today, via ABC.
“When the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie, , games and e-books from overseas.”
While his argument seems reasonable enough, there’s no locally operated competition that can hold a torch to Steam.
It should also be noted that many loopholes exist. For example, the number of lesser retailers selling Steam keys is something the Australian Tax Office is unlikely to get a handle on.
This is breaking new ground for government, though, and loopholes like that will exist until tax laws like this become more common.
The tax is expected to make $350 million over the next four years and doesn’t seem to be in a position to be strongly opposed, either.
The Labor Party, the bill’s main potential opposition, has been outspoken about the government’s failure to introduce similar laws that protect local retailers.