Australian Gst

Topics: Tax, Value added tax, Income tax Pages: 3 (1111 words) Published: August 22, 2012
GST Essay

Australia, economically, is one of the strongest economies in the world. The debate on how to develop the economy even further is, and always will be a never ending one amongst Australia, and also the rest of the world. In 2011, Australia was the 13th largest national economy by supposed gross domestic product (GDP). This year its economy was the fastest-growing in the developed world for the first three months of 2012. Experts suggest that the answers lie within the tax system, to further improve the economy. The Goods and Services Tax (GST) in particular has come under the microscope of recent time, as to how changes to the GST could benefit Australia. Small tinkering’s to the current taxation system can definitely raise more revenue, but of just as much concern is the keeping of a simple tax system, ensuring revenue collection, and knowing what sort of stabilisation effects could occur on the economy. Keeping a simple system could be answered with expansion of the GST base, including no exemptions, thus cutting off less effective and less efficient taxes. Revenue collection could be ensured by collecting more money on efficient taxes that encourage economic activity, and also the added influx of cash from the weakening underground cash economy in Australia. The economy would stabilise due to the substitution of old taxes with new and improved taxes that encourage economic growth. The Goods and Services Tax (GST) in Australia is a Value Added Tax (VAT) on the supply of goods and services in Australia. It was introduced by the Howard Government on 1 July 2000, replacing the previous Federal wholesale sales tax system. The GST is levied at a flat rate of 10% on most goods and services, apart from GST exempt items, and input taxed goods and services. Due to the concessions forced by the Senate when the Howard government imposed the GST, the tax covers only 60 per cent of spending and excludes health, education and fresh food. * Australian Times,...
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