Discuss about the Australia Goods and Service Taxation.
This study is helpful to understand the Australian taxation system. There are different forms of taxation in Australia. Each of the residents and the organizations in Australia need to pay taxes to the all level of federal government of the country. Taxes are required to collect to pay for the public services as well as transfer payment or for redistribution of country’s wealth. In order to discuss this study, it can be mentioned that income tax is the most significant taxation form of Australia. The Australian taxation office used to collect the tax as per the direction of Federal government of the country. In Australia the tax burden is comparatively lower compared to the other countries. In this study, the impact of goods and service tax of Australia (Australia’s main consumption tax) on the residents and the economy has discussed.
In Australia, the goods and the service tax was introduced in the year of 2000. The structure of the Australian’s goods and the service tax (GST) was framed based on the European Union’s Value added tax. In this connection, it can be mentioned that the rate in Australia is lower compared to EU, and the rate is 10 per cent. On the other hand, it can be mentioned that in order to drive the non resources growth in Australia, GST and the boarder tax reform are the two important components. In addition, it can be also stated that in Australia, the rate of GST is lowest and the dependency on the income tax is highest. Moreover, it can be added that a certain portion of Australian goods and services are GST free. These goods and the services are such as cost of food, education, health. In order to purchase these goods or services, the users do not require to pay tax on it. This refers that there is the potential to broaden the GST base tax and then consider that the extra GST revenue can fund to the other inefficient taxes.
In this study, the impact of four GST on the Australian economy as well as several households, has discussed briefly in the following:
This type of GST tried to consider the food, education and the service of health. In the year of 2015 and 2016, the rate of GST revenue has raised by an additional $12.1 billion. In this connection, it can be mentioned that the additional GST revenue can reduce the insurance taxes, stamp duty on the vehicles users of Australia. Any of the remaining additional GST revenues will be returned to the residents in terms of the welfare payments and also in terms of cutting the personal income tax.
15% GST with present exemption:
In this purpose, it can be mentioned that this type of GST can increase the statutory rate up to 15%. In the year of 2015 and 2016, it can be predicted that the evaluation can be increased by an additional amount by $26.0 billion GST revenue. Aster this specific type of GST revenue can decrease the insurance taxes, stamp duty on the motor vehicles by 80 per cent.
In this section, it can be stated that the rise in the statutory GST rate up to 15% will be able to extend and include the GST coverage on health and education. In this current year, the rate of GST revenue has increased by $36.8%. This is also similar to the previous two types of GST. Therefore, it can be inferred that the rest of the GST revenue will be returned to the households after paying the stamp duty and the insurances.
In this type of GST rate, the additional revenue has increased by $42.9 billion. After paying the insurance tax and stamp duty, the remaining GST revenue return to the households by cutting the personal income tax and also by the welfare payments.
The above discussion refers that the Australian households will be benefitted by the raising of real income. In this connection, it can be assumed that the GST revenue has a positive impact on the Australian households, if the households are benefitted from this. On the other hand, the personal income tax is useful for the redistribution of the additional GST revenue.
In order to estimate the impact of the Australian economy, it can be predicted that from the year of 2018 to 2019, the GDP growth of the country will be increased in a rapid manner. The advantage of this situation can be discussed as the Australian GST revenue rate is lower ( approximately 10 per cent), therefore, it can be mentioned that the increasing efficiency cost ( approximately 5 per cent) is also lower compared to the benefits of decreasing of other taxes. These other taxes are imposed on very smaller bases or at higher rate.
Tax reform in Australia was occurred over the last two decades. In the year of 1998, the federal government of Australia released a new tax system (ANTS) program. It was the initial stage of the introduction of 10 per cent GST, the mitigation of the whole sales tax, cutting of the personal tax. In addition, Australia’s welfare payments system and pensions program was also modified in the year of 2000. In the year of 2010, the Australian treasury has presented an article about the Australian taxation and the transfer system. On the other hand, this thesis of article reviewed that as per Australian taxation reform, the federal governmental revenue focused on the four factors such as personal income, personal consumption expenditure, business income, and lastly on the economic rents from the lands and from the natural resources.
It has already discussed that insurance taxes and the stamp duties on the vehicles of Australia can be declined in all four situations, these taxes considered the other taxes on sales of Australia, and can be evaluated by approximately by $8.5 billion in revenues in the year of 2015 and 2016. On the other hand, stamp duties on property is effective to reduce the additional duty from 9 percent and 80 percent in the first and second phases respectively. In the last two phases, the additional duties can be reduced. Therefore, it can be mentioned that the tax revenue through the property conveyancing duty can be evaluated by the amount of $12.9 billion in the year of 2015 and 2016. Moreover, the additional revenue of GST revenue can be spent on the retiring the taxes. In this connection, it can be mentioned that the overall labor income taxes has decreased by the amount of $1.8 billion and $16.4 billion in the year of 2015 and 2016 respectively.
The additional revenue can be collected from the GST. This will in turn raise the average tax rate on the economy. As a result, it can be mentioned that the prices of goods and services will be increased and by providing the disincentives to the labor supply, the real home wages in Australia will be reduced. Nevertheless, it can be argued that higher rate of GST can reduce the other taxes in Australia. As a result, it can be mentioned that GST can reduce the insurance tax, cost of motor vehicles and the stamp duty on conveyance. Hence, by cutting the personal income tax, the households can receive the remaining tax return. The overall income of the households of Australia can be increased.
In order to demonstrate the impact on Australian sectors it can be stated that in the first scenario, the GST rate was same. Therefore, the price of the products will not be positively affected by uniform GST rate of Australia. However, it can be mentioned that the rate of GST has increased in the other sectors except the education, health sector and foods items. As a result, it can be inferred that this will directly increase the overall price level of the country, the aggregate demand of Australia has declined. In this context, it can be stated that the GST revenue rate is helpful to abolish the other tax rates within the country[11]. This has a positive impact on the financial position of Australia and insurance sector of the country. Therefore, the people of the country are willing to take the insurance products. Overall reduction of motor vehicle taxes has a positive impact on the vehicle manufacturing industries and to the households[12]. Nonetheless, by the reduction of the cost of production, economy of Australia has adversely affected.
Conclusion
This study has tried to highlight the taxation policy of Australia. In this purpose, it can be observed that goods and the service tax has a greater role in the country’s economy. On the other hand, this study is helpful to understand the effect of goods and service tax on the Australian households, on the Australian industry and the on the broader economy.
References
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Devos, K., 2012. The impact of tax professionals upon the compliance behaviour of Australian individual taxpayers. Revenue Law Journal, 22(1), p.31.
Doran, C.M., Byrnes, J.M., Cobiac, L.J., Vandenberg, B. and Vos, T., 2013. Estimated impacts of alternative Australian alcohol taxation structures on consumption, public health and government revenues. Med J Aust, 199(9), pp.619-622.
Fogarty, A.S. and Chapman, S., 2013. What should be done about policy on alcohol pricing and promotions? Australian experts’ views of policy priorities: a qualitative interview study. BMC public health, 13(1), p.1.
Gerrans, P., 2012. Retirement savings investment choices in response to the global financial crisis: Australian evidence. Australian Journal of Management, p.0312896212450041.
Olesen, N., 2013. Re-inventing the ATO–ready, willing and underway, Australian Taxation Office, Australian Government, viewed 13 March 2014.
Saad, N., 2014. Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, pp.1069-1075.
Taylor, G. and Richardson, G., 2013. The determinants of thinly capitalized tax avoidance structures: Evidence from Australian firms. Journal of International Accounting, Auditing and Taxation, 22(1), pp.12-25.
Tonts, M., Plummer, P. and Lawrie, M., 2012. Socio-economic wellbeing in Australian mining towns: A comparative analysis. Journal of Rural Studies, 28(3), pp.288-301.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. Oxford University Press.
Snape, J. and De Souza, J., 2016. Environmental taxation law: policy, contexts and practice. Routledge.
Latimer, P., 2012. Australian Business Law 2012. CCH Australia Limited.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
