The federal treasurer’s introduction of a new bill dubbed the Netflix tax, has been welcomed by the Australian Retailers Association (ARA).

Treasurer Scott Morrison last week introduced the proposed laws to parliament, which will see the GST applied to digital products purchased from overseas, including movies, games and e-books. Morrison said the draft laws were “to level the playing field between Australian and overseas business.”

ARA executive director Russell Zimmerman said the proposed change “will put a stop to the advantage online overseas retailers now enjoy over Australian businesses.”

A software subscription service provided by an Australian company now attracts the GST, while those based overseas do not. If the legislation clears parliament, overseas companies will have to collect and remit GST on products purchased by Australian consumers.

Zimmerman said Morrison’s proposal “to close the GST loophole” is the final frontier in their fight to maintain a fair and equal business environment for retailers.

According to Zimmerman, the issue of international online retailers “escaping the payment of taxes” has been a major concern for Australian retailers, and said they were “overjoyed” the government is finally taking an action about it.

“We hope to see the quick passing of the laws in Parliament and the swift implementation of this sensible law,” Zimmerman said.

The Netflix tax is expected to raise $350 million over four years from July 2017, with funds going to the states and territories.

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