Amazon is reacting to a new Australian law requiring it to collect 10% GST (goods and services tax) on orders shipped from overseas to Australian customers in typical Amazon style: instead of simply complying with the law, which goes into effect tomorrow, it is blocking such sales.
As reported by Reuters, Amazon's official response was: "While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites." A spokesperson claimed the move was made to comply with the legislation and not to avoid collecting tax.
The new law applies to orders under A$1,000 (about US$760). Companies had been exempt from collecting GST on orders under that amount, even though the tax applied. That had made imported products cheaper than similar products sold by Australian retailers.
Australian Treasurer Scott Morrison commented: "The second-biggest company in the world, run by the richest man in the world, shouldn't get a leave pass from paying tax in Australia. If multinationals aren't forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia."
Some speculate that the move is in part to drive Australian customers to Amazon's relatively new Australian website, which many say has far fewer products available than its U.S. site.