Taxation in Australia
Australian GST revenue is collected by the Federal government, and then paid to the states under a distribution formula determined by the Commonwealth Grants Commission.
Australians pay tax for the provision of healthcare, education, defense, roads and railways and for payments to welfare, disaster relief and pensions.
[1] The "classic definition" of a tax used by the High Court derived from Matthews v Chicory Marketing Board (Vic) (1938), where Chief Justice John Latham stated that a tax was "a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered".
[citation needed] The first taxes in Australia were raised to help pay for the completion of Sydney's first jail and provide for the orphans of the colony.
[citation needed] After 1824 the Government of New South Wales raised extra revenue from customs and excise duties.
When de la Condamine's appointment was not confirmed by the Secretary of State for War and the Colonies William Huskisson, the duties fell to James Busby who held the position until December 1835 when the position was filled by William McPhereson.
[5] Colonial governments also raised money from fees on wills and stamp duty, which is a tax imposed on certain kinds of documents.
[8] In 1972, the government of William McMahon appointed the NSW Supreme Court judge Kenneth Asprey to conduct a full and wide-ranging review of the tax system.
Unlike some other countries, personal income tax in Australia is imposed on an individual and not on a family unit.
CGT operates by having net gains treated as taxable income in the tax year an asset is sold or otherwise disposed of.
[14] From 2015/16, designated "small business entities" with an aggregated annual turnover threshold of less than $2 million were eligible for a lower tax rate of 28.5%.
Since 1 July 2016, small business entities with aggregated annual turnover of less than $10 million have had a reduced company tax rate of 27.5%.
In both cases the trustee will be issued a notice of assessment subsequent to lodging the trust tax return.
State governments do not levy any sales taxes though they do impose stamp duties on a range of transactions.
Two types of sales are treated differently: Local governments are typically funded largely by taxes on land value (council rates) on residential, industrial and commercial properties.
The State governments also levy stamp duties on transfers of land and other similar transactions.
[17] The PMC replaced the departure tax in 1995 and was initially described as a charge to partially offset the cost to government of the provision of passenger facilitation at airports, principally customs, immigration and quarantine functions.
The Federal Government imposes excise taxes on goods such as cigarettes, petrol, and alcohol.
Payroll taxes in Australia are levied by state governments on employers based on wages paid by them.
The tax is self-assessed in that the employer calculates the liability and then pays the appropriate amount to the Office of State Revenue, by way of a monthly, quarterly or annual return.
From 1 July 2014:[32] On 8 December 2004 new legislation was passed making it mandatory for an employer that has, or is a member of a group that has, an expected payroll tax liability equal to or greater than $100,000 per annum, to lodge and pay their payroll tax return via Revenue Online (ROL).
Most fringe benefits are also reported on employee payment summaries for inclusion on personal income tax returns that must be lodged annually.
The compulsory nature of Australian Superannuation means that it is sometimes regarded as being similar to social security taxes levied in other nations.
