Functions of Taxes and Taxation System in Australia

Tutorial questions

TABLE OF CONTENTS
Week 1.......................................................................................................................................3
Week 2.......................................................................................................................................3
Week 3.......................................................................................................................................4
Week 4.......................................................................................................................................5
Week 5.......................................................................................................................................6
REFERENCES...........................................................................................................................8

Week 1
The functions of taxes are a manifestation of their essence; they are a means to
represent the characteristics of taxes. The functions of taxation illustrate its social purpose of
the value-based distribution and redistribution of income. The main interaction of the
Australians has with the ATO which is the Australian Taxation Office for lodging an income
tax return and having tax being taken form their pay (Tran and Xu, 2020). The aim of the
ATO is to make sure that everyone pays right amount of tax for those especially who hide
tehri income with the objective to evade their tax obligation. The main responsibility of ATO
is to manage and administer the Government’s tax and legislation. It is the amin collection
agency in Australia. The tax revenue contributes to 80% of government revenue which helps
in funding the social and economic policies.
Some of the key responsibility and functions of taxation system are stated below.
 Collection of revenue (including GST)
 Administering the aspects of superannuation system
 Excise
 Income tax including PAYG withholding and instalments
 Fringe benefits tax
 Grants and schemes in relation to fuel
 Sharing the information with “Centrelink, the Child Support Agency, the Australian
Bureau of Statistics and the Department of Immigration and Citizenship
 Collection of the Higher Education Contribution Scheme (HECS) and Higher
Education Loan program (HELP) debt through the taxation system
 The Australian Business Register (ABR) and the Australian Business Number (ABN)
system.”
Week 2
According to Australian Taxation Office (ATO), there is attest to know the residency
status of the individual. The test is known as residency test, which is the primary test for
determining the tax residency. According to this test, if the individual resides in Australia,
then the individual will be considered as an Australian resident for the purpose of taxation
and the person is not required to apply for any other residency tests. Few factors to be taken
into account for determining the residency status includes:
 Physical presence