Just like other taxation systems, the tax system in Australia covers different areas including import tax and income tax. However, the most important tax to Australian nationals and other people residing in Australia is the income tax.
History of Income Tax in Australia.
Income tax began in Australia in 1880 when Tasmania decided to begin taxing all the income companies generated in the state due to an economic issue in government. It did not take long for other Australian states to see the importance of taxing income. They followed suit with the southern states introducing tax in 1884 while the rest of Australia having income tax by 1907.
Income Tax Today
Nowadays, the tax income in Australia is divided into three categories these are; business income, personal earnings, and capital gains tax.
The personal taxes in Australia differ depending on what a person earns as wages or salary. The lower the earnings, the lower the percentage of tax to be paid. This tax can be classed as a progressive tax meaning that people pay an amount depending on their means that is, the income they get.
This, therefore, means that people may pay anywhere between 0 percent paid by those individuals who earn over six thousand only and 45 percent paid by those for those earning over one hundred and eighty thousand Dollars per year.
Company tax in Australia is set at a flat rate of thirty percent. However, a company can reduce the amount to be paid by using such means as a yearly dividend to shareholders.
In Australia, Capital Gains tax is categorized under the tax income. It affects any individual or corporation that owns an asset and any entity owning anything although the percentage to be paid differs.
Australia is not like other countries around the world as it offers a fair income tax system which is easy to understand. This is to enable all the residents to understand their tax status and how much they need to pay. Therefore, any complications associated with the tax systems are not there in Australia.