(PDF) Taxation Law in Australia | Assignment

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Running head: TAXATION LAW IN AUSTRALIATaxation Law in AustraliaName of the Student:Name of the UniversityAuthor’s Note:
TAXATION LAW IN AUSTRALIA1Table of ContentsQuestion 1........................................................................................................................................2Question 2........................................................................................................................................5Question 3........................................................................................................................................7Question 4........................................................................................................................................9Question 5......................................................................................................................................10Question 6......................................................................................................................................11Reference.......................................................................................................................................13
TAXATION LAW IN AUSTRALIA2Question 1Requirement aThe major role which is played by the tax system in Australia is to maintain the revenueadministration system of the Government which is then used for running the nation as a whole.There are a variety of taxes which are in place in Australia which relates to income tax system,superannuation and excise which are all maintained by the taxation system incorporated by theGovernment1. Therefore, in general the taxation system in Australia maintains the revenuesystem and flow of cash from public to government and then back to the public in Australia.Requirement bThe concept of equity in a tax system refers to the principle that the burden which isrelated to tax liability should be imposed fairly on the society. The principle of equity is made upof two elements which are horizontal equity and vertical equity2. The concept of horizontalequity states that individuals should pay the same amount of taxes while the concept of verticalequity states that individuals who are in different positions should pay different sum as taxes.Requirement cAs per the provisions of Section 4-15 of Income Tax Assessment Act 1997 (ITTA 1997),establishes the method in which an individual can work out taxable income for the year. Thegeneral formula which is followed for computing the taxable income of the business isTaxableIncome=AssessableIncomeDeductions1Winer, Stanley L., Paola Profeta, and Walter Hettich.The political economy of taxation. Oxford University Press,2013.2Lindsay, Ira K. "Tax Fairness by Convention: A Defense of Horizontal Equity."Fla. Tax Rev.19 (2016): 79.
TAXATION LAW IN AUSTRALIA3The above formula makes it clear that the taxpayer needs to sum up his assessableincome and the deductions which are applicable and finally subtract the total deductions from theassessable income of the individual to arrive at taxable income of the individual3.Requirement dThe main principle of progressive tax system is to increase the rate of taxation as theincome of the taxpayer increases. In this tax system, tax are charged as per tax brackets whichare set which progressively increases to a higher rate of tax as the income of the taxpayerincreases4. This sort of taxation system focuses to reduce the inequity of distribution of incomeamong individuals and charges more taxes from lower earning group of peoples and more fromhigher earning group peoples5. Progressive taxation system aims to bring about growth anddevelopment in areas where it is difficult to bring about intervention of government.Requirement eThe section which includes the value of allowances into the assessable income is Section15-2 of ITAA 1997.Requirement fThe“taxation ruling of TR 2004/15”includes provisions which is related to the casewhere a company which is not incorporated in Australia will be treated as an Australian residentas per the second statutory test of the definition of“Resident of Australia”which is stated in“subsection 6(1) of the ITAA 1936”.3Bobek, Donna D., Amy M. Hageman, and Charles F. Kelliher. "Analyzing the role of social norms in taxcompliance behavior."Journal of Business Ethics115, no. 3 (2013): 451-468.4Chen, Shu-Hua, and Jang-Ting Guo. "Progressive taxation and macroeconomic (In) stability with productivegovernment spending."Journal of Economic Dynamics and Control37, no. 5 (2013): 951-963.5Mehrotra, Ajay K.Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation,1877-1929. Cambridge University Press, 2013.
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