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Small Businesses Call For End To “Netflix Tax” Loophole

Customers are already paying more but small businesses say that the new “Netflix Tax” doesn’t go far enough.

As reported by The Australian, “business owners are calling foul, declaring the tax still allows multinational companies to exploit loopholes and pass the tax burden on to locals.”

While the new tax now sees digital transactions as subject to the standard 10% GST, business-to-business transactions are exempt.

In reality, some small businesses say that this creates an unbalanced playing field that passes the burden of GST onto them.

Darcy Naunton, co-founder of York Butter Factory, told The Australian that there was no reason a software company should be exempt from GST because of where they originated.

“We fully expect these costs will be passed on to the consumer,” he says.

According to him, “Australia must do more to closely manage this or look at closing loopholes for companies who are trying to dodge this, potentially at the expense of local players.”

Treasurer Scott Morrison claims that the new tax – first proposed in 2015 – “ensures Australian businesses selling digital products and services are not disadvantaged relative to overseas businesses that sell equivalent products in Australia.”

The “Netflix Tax” is expected to bring in $350 million in addition revenue.

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