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Originally Posted by XR6TCraig
Not only would they include it in their price initially but also then claim the expense back in their BAS statements. Win/win for the business while the consumer gets screwed even more.
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I think you need a bit more of an education on the tax system there.
They only claim the GST back on their BAS, because GST is transferred to the end purchaser, which in this case would be the person buying the item. And in that case it would only equate to a few cents or fractions of a cent.
The remainder can be claimed as an expense against transaction via their tax returns, which actually negates your previous comment of:
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where as it loses value through each electronic transaction as the bank takes a cut each time?
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Electronic transactions are like Newtons law of energy conservation. Its never created or destroyed, just turned into different forms.
The $50 is turned into a partial income to the bank and the majority remains with the retailer. The retailer is then allowed to claim the expense against their profit, which means they pay less income tax to the ATO. If the expense wasn't incurred they would have to pay a greater portion of the profit to the ATO as income tax anyways.
The only way your $50 remains $50 theory holds water is when I hand $50 to you personally. $50 turns into $35 the moment you hand it to a retailer as the ATO immediately hits them with an income tax liability and the only way the retailer can get it back close to $50 is to claim back expenses.