Tuesday, June 16, 2015, AM | Leave Comment
It never hurts to maintain a solid grounding about the Australian income tax system. Not only are tax courses helpful for entrepreneurs who want to prepare tax returns, they also benefit the employee or payroll worker by showing him or her allowances and deductibles are featured in a country’s tax system.
A Great Revenue Generator
Indeed, the tax system in Australia is noted as being a major contributor to the generation of revenue by the government. This system, like other tax systems in the world, is designed so each country can tally and collect income from its residents.
The Primary Areas Where Taxes Are Collected
In Australia, an entity or person can be taxed under four categories. They can be taxed for any income they generate through personal earnings from a salary or hourly wage, or pay taxes for capital gains, payroll or the income generated from operating as a business.
Therefore, taxes are received by the government from the personal earnings of taxpayers, capital gains, payroll and business earnings.
Breakdown of Taxes
The Australian Around 65% of the Australian government’s revenue is gathered from three of the listed generated sources of tax.
The three-tiered government of Australia regularly receives around 57% of the contributions of its revenue from the governmental income tax system.
The fiscal year for Australians begins on 1 July and ends on 30 June of the following year.
When Australia Implemented the Income Tax
Like any income tax, a variety of deductions or allowances is considered when calculations of tax are made.
Some basic allowances are issued to each tax payer against his income. You may wonder, at his point, when Australia started implementing a taxed income system.
Tasmania – A Major Player in Australia’s Tax History
Back in 1880, the first state in the country that began collecting and calculating tax was Tasmania.
Tasmania began collecting the tax when they were beset by a financial crisis that year.
By 1907, the rest of the country also became acclimated to the idea.
Tax Generation – the Progressive Tax
Knowing the above information can help you better understand the revenue generating characteristics of the income tax system.
Tax that is paid by an individual on his own personal income is called a progressive tax in Australia.
The progressive tax is defined, specifically, as an increased rate of tax that is linked to and defined specifically as an increased rate of taxation.
This rate is determined by a base of taxable amounts. The progressive tax increases as the salary of the taxpayer increases.
While some people say call it a progressive tax, it can also stymie anyone who wants to make a large salary. The current taxable income range for taxpayers in Australia is above $6,000 annually, as of 2012.
The maximum rate of income tax that is payable by Australians is around 45%. Most of the taxpayers remit a levy for Medicare of 1.5% as well.Facebook.com/doable.finance