Taxation Part 2 Flashcards
What are direct taxes?
Taxes paid in relation to the earning of income and are usually paid by the person receiving the income
Who pays for fringe benefits and payroll tax?
The employer pays the tax
What is Pay As You Go (PAYG) tax?
A direct income tax, which is a simple, integrated system for reporting and withholding amounts of tax on business and investment income
What is the Medicare Levy?
A direct tax payable by most taxpayers to cover some of the costs of the public health system
What is the Higher Education Loan Program (HELP)?
A direct tax administered by the government to assist eligible students with their student contribution or tuition fees
What is capital gains tax?
A direct tax on the profit obtained when selling an asset
What is exempt from capital gains tax?
Most homes and motor vehicles
What is fringe benefits tax?
A direct tax payable on a non-salary benefit provided to an employee
What are indirect taxes?
Taxes levied on consumption or spending, not income
What is Goods and Services Tax (GST)?
A broad-based indirect tax of 10% on most supplies of goods and services consumed in Australia
What are some examples of products excluded from GST?
Fresh produce, bread, milk and prescription medicine
What is excise duty?
A commodity based income tax on petroleum, tobacco and alcoholic products
What is custom duty?
An indirect tax payable on imported goods at the rate determined by the Customs Tariff Schedule
What percentage of tax does the government charge on a pack of cigarettes?
61.1% of the sale price
Why does the government place such high levels of tax on cigarettes?
They want Australians to quit smoking and make it harder for people to purchase tobacco
Why is placing high levels of taxes on cigarettes not effective in deterring people from purchasing them?
Those who are already addicted will still purchase tobacco no matter the cost
Which taxes does the local government collect?
Property rates, which are based on the value of a house or land
Which taxes does the state government collect?
Payroll tax, stamp duty and land tax
When is payroll tax payable?
By businesses based on the amount of their wages bill over a threshold amount
When is stamp duty payable?
On certain types of transactions such as buying property or cars
When is land tax payable?
If an individual or business owns land valued over a certain level
Which taxes does the federal government collect?
Income tax, medicare levy, company tax, GST, fringe benefits tax, capital gains tax, excise, customs duty and departure taxes
