Australians shopping online face $5 parcel tax

Will be in addition to upcoming GST tax on goods below $1000.

  • Proposed $5 tax on small parcels bought from overseas sellers
  • Will subsidise surging security screening costs
  • On top of upcoming 10% GST tax

Australians will be forced to pay a $5 tax on items they buy online from overseas retailers if a new government proposal comes to pass.

A Department of Home Affairs discussion paper leaked to Fairfax Media reveals the surcharge would be added to items below $1000 – such as clothes, smartphones and toys – that account for 90% of the parcel deliveries entering Australia.

The revenue will apparently go towards covering the rising expense of security screening.

The revelation comes as the cost of overseas goods below $1000 is set to increase by 10%, once GST is applied from 1 July.

"As the volume of imported low value consignments continues to grow, so too do the costs of biosecurity, cargo and trade border activities for those consignments. This has created increasing inequity and cross-subsidisation, where importers of high value consignments are paying for the border activities attributable to other users," the February 2018 discussion paper says.

"Existing cost recovery arrangements are no longer sustainable and will not support Australia's future trading environment."

The proposals are likely to face opposition from online marketplaces eBay and Amazon, which host most of the online transactions between local shoppers and overseas sellers.

Nearly 40 million parcels worth less than $1000 were imported to Australia in the last financial year, representing an increase of 22% compared to the year before.