Treasurer Scott Morrison said in a statement that from 1 July 2018, the GST will become applicable to all goods costing $1,000 or less that Australian consumers buy from overseas.
The move provides a resolution to long-standing complaints from local businesses that being exempt from GST has given an unfair advantage to overseas companies.
“Removing a distortionary tax advantage to foreign businesses will restore integrity to Australia’s tax system to close down loopholes and prevent tax avoidance,” he said.
According to the treasurer, the start date was designed to give offshore suppliers and online marketplaces like eBay and Amazon time to implement the change.
Mr Morrison said the government is also looking to apply GST to digital goods and services sold in Australia via foreign websites, ensuring a fairer marketplace for local businesses and also ensuring the country receives its full share of tax revenues.
The Australian Retailers Association (ARA)’s executive director Russell Zimmerman applauded the move, but criticised the lag in its start date.
“We are disappointed there will be a 12-month delay before overseas retailers start collecting this tax, but we look forward to Australian retailers finally being given a fair chance,” he said.