Indirect Tax in Australia 2025: Key Updates & Strategies

Australians are used to hearing about income tax, but indirect taxes—like GST, excise, and duties—often have just as much impact on our day-to-day spending and business decisions. With 2025 ushering in a suite of reforms and new digital tax rules, now is the time to get across what’s changing and how it could affect your finances.

Understanding Indirect Tax: Beyond the Basics

Indirect taxes are those collected by an intermediary (like a retailer or service provider) and then paid to the government. The most familiar is the Goods and Services Tax (GST), but indirect taxes also include excise duties on fuel, alcohol, and tobacco, as well as customs duties on imports.

• GST: 10% tax applied to most goods and services in Australia

• Excise: Levies on specific products, especially fuel and alcohol

• Customs duties: Taxes on imported goods above certain thresholds

While these taxes are built into prices, their impact is far from invisible—especially when policy settings shift.

2025 Policy Updates: What’s New This Year?

In 2025, several key changes to indirect tax have taken effect, reflecting both local policy shifts and global trends:

• Digital Services GST Expansion: The GST net now covers a wider array of digital products and services. Streaming subscriptions, online courses, and digital advertising purchased from overseas providers are squarely in scope, closing loopholes that previously favoured foreign giants.

• Low-Value Goods Imports: The $1,000 threshold for GST-free online purchases from overseas has been scrapped. Now, all goods imported for personal use attract GST at the point of sale, levelling the playing field for local retailers.

• Excise Indexation: Excise rates for fuel, tobacco, and alcohol have increased in line with inflation, following the August 2024 CPI adjustment. Expect a slight bump in prices at the bowser and bottle shop.

• Customs Modernisation: The rollout of the Australian Border Force’s new digital customs platform aims to streamline import declarations and tax payments, but also increases enforcement against under-declared values.

For businesses, these changes mean more compliance work—especially if you’re selling online or importing goods. For consumers, expect subtle price shifts, particularly for digital content and imported products.

Real-World Impacts: Who Wins and Who Pays?

The ripple effects of indirect tax reforms are felt across sectors:

Households

• Digital Spending: A family subscribing to three streaming services from US-based providers could see their annual entertainment bill rise by 10% due to GST application.

• Online Shopping: Ordering fashion from overseas retailers is now subject to GST at checkout, with some platforms adjusting their checkout experience to reflect the new rule.

• Everyday Expenses: The excise hike on fuel adds a few cents per litre, which, combined with global oil price volatility, can noticeably increase weekly commuting costs.

Small and Medium Businesses

• Digital Products: Local businesses offering online subscriptions or courses may benefit as overseas competitors lose their GST-free edge.

• Compliance Burden: Businesses selling to Australian consumers from abroad must now register for GST, track sales, and remit tax to the ATO. This levels the playing field but adds paperwork.

• Importers: Small importers need to be vigilant with customs declarations, as the new digital platform increases audit visibility and penalties for errors.

Government and the Economy

• Revenue Boost: Treasury estimates suggest these reforms will add over $700 million to GST receipts in FY2025, supporting health, education, and infrastructure funding.

• Fairness: The changes are designed to ensure all sellers—local or overseas—contribute equally to the tax base.

Strategies for Households and Businesses in 2025

With these changes, here’s how Australians can stay ahead:

• For Households: Review your digital subscriptions and online shopping habits. Consider consolidating services or buying local where possible to manage your indirect tax exposure.

• For Businesses: Invest in accounting software that automates GST and customs compliance. If you sell digital products or import goods, make sure your pricing and systems reflect the new tax rules.

• Stay Informed: The ATO regularly updates its guidance on GST for digital products and low-value imports—keep an eye on official channels for any tweaks.

Finally, both consumers and business owners should watch for the next federal budget, as further tweaks to indirect tax are always on the table in response to economic shifts and global trends.

Conclusion

Indirect tax may not grab headlines like income tax, but it’s a powerful lever shaping what Australians pay at the checkout, online and off. With 2025’s reforms now in play, understanding the new rules—and adjusting your financial habits—can make a real difference to your bottom line. Stay proactive and informed to make indirect tax work for you, not against you.