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Loophole in "Netflix tax": Choice

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Australians who conceal their location to download music, TV shows, books and music may escape paying the GST even if it is imposed by the Federal Government.

What has been called “intangible services” may attract the 10 per cent tax under plans approved by federal and state treasurers yesterday.

But consumer advocacy group Choice says Australians who use virtual private networks, which make them appear to be outside the country, could avoid the GST.

Instead, the government should tackle the root cause of the problem – the exorbitant domestic costs of TV shows, music and movies, and difficulties accessing them.

“We need to make it easier … in order to encourage greater competition,” Choice chief executive Alan Kirkland told ABC radio on Friday.

Some online streaming services have already responded to the plan.

Netflix US says it will happily add the GST to the cost of its service once the federal government makes it legal.

Labor has also indicated it will look at the proposal, while criticising the government for not targeting the “big end of town”.

“I’ve some sympathy for people who say that these internet-provided media products don’t pay the GST, but I think we need to go back one step,” Opposition Leader Bill Shorten said.

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