Australian govt hits out at Amazon for decision to 'blacklist' Australian customers over GST


From July 1 this year, Australian customers who visit an international Amazon store will be redirected to the Australian site, which has been running since late last year.
From July 1 this year, Australian customers who visit an international Amazon store will be redirected to the Australian site, which has been running since late last year.PHOTO: AFP

CANBERRA (XINHUA) - Australian Treasurer Scott Morrison has slammed US e-commerce giant Amazon for its decision not to ship overseas goods to Australian customers because it did not like new tax rules that targeted international retailers.

Amazon announced on Thursday (May 31) that it would prevent Australians from buying from the Amazon US store - or any international Amazon stores - which frequently have cheaper goods and a greater range compared with the Australian Amazon store.

From July 1 this year, Australian customers who visit an international Amazon store will be redirected to the Australian site, which has been running since late last year.

The move is a response to Australia's new goods and services tax (GST) policy to all overseas purchases under A$1,000 (S$1,010) announced by the Turnbull government last year in a bid to "level the playing field" between Australian and overseas retailers.

Although Amazon has said it supports the new GST rule in principle, it argues that delivery companies such as Australia Post should be made to collect the tax, not the stores.

"We have had to assess the workability of the legislation as a global business with multiple international sites," an Amazon spokesman said on Thursday. "From July 1 we will be redirecting Australian customers from our international Amazon sites to amazon.com.au."

Some international products will still be available to Australians on a new platform called the global store, but the range will be much smaller. The global store currently has 4 million items, compared with roughly 500 million on the full American store.

Amazon's ban applies to all shipments to Australian addresses, which means that even customers with VPNs (virtual private networks) that hide their location will be able to access an international site but not be able to ship their goods home.

Mr Morrison slammed Amazon for being unwilling to collect GST while other online retailers were happy to work within the system.

"The second biggest company in the world, run by the richest man in the world (Jeff Bezos) shouldn't get a leave pass from paying tax in Australia," Mr Morrison said on Friday.

"If multinationals aren't forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia."

Mr Morrison said it was purely an issue of fairness, and about creating a level playing field.

"The government doesn't apologise for ensuring multinationals pay a fair amount of tax here in Australia," he said. "That tax revenue is used to fund essential services."

The move is seen as a win for local retailers which had lobbied for the 10 per cent tax to apply to all goods purchased from offshore retailers - not just on those greater than A$1,000.

One of Australia's leading retailers, Mr Gerry Harvey, the executive chairman of Harvey Norman, welcomed the government's decision and criticised Amazon for its attitude.

"They think they have the right to pay no tax in Australia," Mr Harvey said on Thursday of Amazon's decision to "blacklist" the country.

Meanwhile, Labor MP Andrew Leigh said Amazon's ban was "an utter embarrassment" for Mr Morrison and the government. Like Amazon, the opposition supports the general principle but has taken issue with the government's model.

"Less purchasing choice means higher prices for Australian consumers at a time when they are struggling with record low wages growth and cost of living pressures," Mr Leigh said.