Netflix tax is back on the attack

Steam and Netflix to be hit with 10 per cent GST

It looks like reducing the tax free threshold for imported digital goods and services like Netflix in Australia is once again high priority for the Australian government ahead of next week's budget.

Fairfax has reported that during the most recent treasurers' meeting, only the West Australian treasurer objected to the inclusion of the 'Netflix tax'.

And from the report it seems that this objection was raised as a bargaining chip for the distribution of government funds at state level, rather than representing a genuine opposition to the tax.

This tax will increase the prices of online services and distribution platforms like Netflix and Steam by 10 per cent.

Not just an internet tax

Three years ago, the estimated government revenue for online purchases of intangible goods was $1 billion per annum. Since then the sales of online software have doubled.

Apple said that the change would not affect iTunes as the company already pays GST for purchases through the online store.

Assistant Treasurer Josh Frydenburg, is expected to negotiate extending the tax to include imported parcels with contents valued under $1000, potentially reducing the threshold to the Canadian level of $20 following the budget release mid next week.