Hockey flags more digital taxes

The federal treasurer has flagged further taxes on digital products bought from overseas.

Joe Hockey told a small business forum in Sydney he is working with state treasurers to tighten tax free thresholds on digital goods.

"Our application of the GST for imported digital products is potentially going to go further following discussions with the state treasurers in mid August. We have now found a way to ensure that those providing goods from overseas into Australia do not get any advantage out of the tax free threshold," he said on Friday.

Mr Hockey said the current system, whereby a book seller in Sydney has obligations to pay tax but Amazon doesn't, is unsustainable.

He said there was scale to go to major overseas companies, who sell goods digitally, to ask them to charge consumption tax.

"We're doing it on digital services. It is now an open opportunity on physical products, like parcels," he said.

"The products that are coming into Australia are below the tax threshold and it's causing problems for Australian retailers.

"We believe now we can go to those companies - using the mechanisms provided through the OECD, G20 and others - and say to those companies, you have to apply the GST so that there is a level the playing field with Australian retailers."

Mr Hockey said he also wanted to ensure that companies pay a company tax if they have a physical presence in Australia.