It's a little more complicated than that. Apple doesn't collect income tax, only what is effectively a sales tax. In Australia, small businesses don't need to collect or pay a sales tax. The small business should keep that 10% tax on the sale. Apple seem to want to force the small business owner into having that tax collected and paid to the Australian Government?
I am beginning to thing that it's not a good idea to deal with Apple as a sole trader at all. The better option might be to throw away some money into registering a company.
I would love to hear how other Australians deal with this situation. The other thing is not clear to me, is if Apple is forcing GST on small businesses, do the small business owners get that tax back at tax time if they are in the low income category.