Online retail giant eBay says it will not be following Amazon’s move to block shoppers from using its overseas websites in response to changes in the way Australia taxes online imports.
Amazon announced on Thursday that Australia-based users of its US and other overseas sites will be redirected to Amazon.com.au from July 1, when the 10 per cent goods and services tax will be expanded to apply to all online imports.
Currently, GST is only levied on items bought from overseas sites and shipped to Australia if they’re worth more than $1,000, while local retailers have to charge GST on everything they sell.
eBay Australia managing director Tim MacKinnon said eBay has a solution that will allow Australian consumers to use all eBay sites while capturing the required GST.
“We know how Australians value the global as well as the local selection and we are not going to turn off the global selection as a way of complying with the tax,” Mr MacKinnon told AAP.
“We have worked really hard to have a solution in place by July 1.”
Mr MacKinnon said eBay has developed a system that will collect GST from sellers and remit that to the Australian Taxation Office.
He said the alternative, making millions of eBays sellers across the globe responsible for collecting GST, would have been too difficult to enforce.
Queensland University of Technology retail expert Gary Mortimer said given the majority of online shoppers in Australia use local sites, he thinks Amazon’s decision will have little impact.
An associate professor in QUT’s Business School, Dr Mortimer said Australians spent about $24 billion in online shopping last year with 80 per cent of that on domestic retail sites, according to National Australia Bank online sales index.
“The proportion of overseas online purchases was around $4.8 billion, which is a very small portion in the grand scheme of things,” he said.
“Amazon has gone ‘it is just too small of a market and not worth our time’ and our existing offer in Australia is sufficient.”
Dr Mortimer said he doubted there would be much of a consumer backlash to Amazon’s decision to cut access to its overseas sites.
Amazon has previously said platforms that facilitate the sale should not have to collect the tax and argued that it should be the responsibility of Australia Post and other parties that deliver items.
Treasurer Scott Morrison said it is disappointing that Amazon has “taken this out on consumers in Australia”.
“You don’t get a special deal because you’re a big company or a multinational,” Mr Morrison said on Friday.
The changes are designed to level the playing field for Australia’s local retailers by removing the tax advantage that foreign businesses have under the current regime.
Amazon says it will create a global store on the Australian site where shoppers can have access to US and UK sellers.
The global store will have more than four million items, while Amazon US has 480 million products.