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Friday, 01 June 2018 11:10

To Amazon, Australia really doesn't matter that much

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Online retail behemoth Amazon has no problem dealing with the value-added tax in the UK and charging it correctly to those who should be slugged. Yet it claims to have issues with charging the GST to Australians who visit its US website.

This turns out to be even more mystifying when one is made aware that Amazon can correctly charge tax on items shipped to every single US state.

Amazon charges tax in India too. I know; I bought a phone from the company the last time I was in Bangalore. But that is a huge market, with a population of 1.3 billion and a growing middle class. And if you want mind-bending tax structures, I would recommend taking a look at India.

In the light of this, it seems passing strange that the company should decide that it is unable to set up its site to charge the GST on purchases that Australians make.

The truth would be rather unpalatable to Australians. The number of shoppers in this country is trivial in terms of Amazon's global sales and it really does not give a rat's.

Australians, who in this case have an inflated sense of their own importance, think that Amazon cares about them and their little purchases. Jeff Bezos, the Amazon boss, is only bothered about one thing: money. Not that this is different from the head of any other firm.

The population of Australia is about 24 million. That's a tiny market for a company with Amazon's ambitions. The company has its eyes fixed on much bigger things, like for example the upcoming awarding of a massive defence contract in the US which would be worth US$10 billion.

The UK is a market of some 66 million, nearly thrice the population of Australia. It also has a much bigger floating population. So it makes sense for Amazon to operate there and cater to the tax structure.

In Australia's case, Amazon decided to stare down the government and see if it would fold. After all, the powers-that-be always go on bended knee when confronted by American businesses.

The most recent example of this came when the Australian Signals Directorate changed the requirements for Protected cloud providers — who could then win contracts to host top-secret government data — to accommodate Microsoft.

Some years ago, former prime minister John Howard bent the rules of the Pharmaceutical Benefits Scheme, that most sacred of Australian services, to suit big pharma in the US at the time when a free trade deal was being negotiated.

So, it was not unreasonable for Bezos to expect that Australia would fold again. But now that it hasn't happened, it is unlikely that he will lose too much sleep over it.

Australians had better get used to it and disabuse themselves of the illusion that their country is some mighty power which gets decent treatment on the world stage. The Americans use the country to wipe their boots on and expect the locals to clean up after that.

Amazon isn't the first company to spit in Australia's face and it won't be the last either. High time to develop some self-reliance.


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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