Taxation Part 1 Flashcards
What is a tax?
A mandatory financial charge or type of levy imposed upon a taxpayer by a government organisation, in order to fund various public expenditures
What is the case when there is a failure to pay tax or evasion and resistance to taxation?
It is punishable by law
What does the levying of taxes aim to do?
Raise revenue to fund governing and alter prices in order to affect demand
What can money provided by taxation help to fund?
Economic infrastructure, military, scientific research, public insurance and operation of government
What is the tax-free threshold?
People who earn less than $18,200 per year do not need to pay any income tax
What is income tax?
The tax that individuals pay on the money they earn
What happens to people who receive certain pensions such as the disability pension in regards to tax?
They do not need to pay any tax because their income is classed as exempt
What is the law regarding tourists and tax in Australia?
They do not need to pay tax when travelling to Australia, particularly on luxury goods which is known as duty free shopping
Which level of government would a kindergarten be funded by?
Local government
If Tom earns $100,000 and Jerry earns $40,000 and they both purchase a television worth $1,700, who ends up losing more of their income regarding GST?
Jerry will need to give up a bigger percentage of his income to cover GST than Tom
What effect do allowable deductions have on assessable income?
They decrease assessable income
In what case will income from a hobby not be assessed?
If you have a garage sale
In relation to an ordinary employee, what rate of income tax does the Prime Minister of Australia pay?
Pays the same marginal rate of income tax
When can a donation of $2 or more be claimed as an allowable deduction?
If it is to an approved charity, you didn’t receive anything in return and you have completed your tax return
What are the three levels of government in Australia?
Local, state and federal
