Taxation Law and Practice: A Comprehensive Analysis

Desklib provides solved assignments and past papers to help students succeed.

Taxation Law and Practice
1

Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................3
Question 3........................................................................................................................................4
Question 4........................................................................................................................................4
Question 5........................................................................................................................................5
References........................................................................................................................................6
2

Question 1
Significance of this Tax policy issue
This tax policy issue is different from several other tax policies because of various reasons. One
of the reason can be economy based as the economy of Australia is weak and the government
wants to make it strong. The burden of the tax policy is sometimes not bearable for the small and
medium business as even after making small profits they suffer losses due to the decrease in
income after paying a large amount of tax. So, due to some of these reasons this tax policy issue
is significant (Parliament of Australia, 2019).
Question 2
Effect of these tax policy on the key stakeholders
Effect on the government
As the government wants to increase the GDP of the country this tax policy has insured 1%
growth in the GDP of the country. The government is also keeping the share of the GDP within
the capacity of 23.9 percent which further limits the tax burden of the Australia peoples. This tax
policy will help the government to reduce the fiscal and make sure that Australia is greatly
equipped to face future uncertainties. This further helps the government to reduce the debts in the
country as this make sure about the country’s finance which can remain sustainable as well as
future generations should not suffer because of the outcome of current spending.
Effects on the businesses
This tax policy can be helpful for the small-medium enterprises as this policy will make sure
about all the taxpayers especially the multinationals and the big businesses who should pay a fair
share of the tax. As the objective of the government is to make a strong economy for which the
people of Australia have to do the various jobs by which they can pay the bills which will further
help them to save and invest.
Effects on the workers
This lowering tax policy has a great impact on the hardworking Australians as the fiscal
management has made it possible for the government to make personal income tax plan which
further helps in providing simpler and lower tax. Under this policy the government is giving the
maximum relief to the low and the middle-income earners which will the small Australian
workers to get relieved with the burden of the tax. Which can further reduce their pressure of
cost of living as low and middle earner will get the reduction in the payment of tax up to $1080
for the single earner or also up to $ 2160 for the double-income family. There will be an
additional tax benefit for the small and medium earners of Australia under this policy as by an
increase in the threshold of 19 percent tax brackets from the 41000 $ to the 45000 $ and also
they will get further benefit of low-income tax from 645 $ to the 700 $ (Budget, 2019).
So, there were several effects of this tax policy on the different key stakeholders.
3

Question 3
Pros and cons of this tax policy
There can be various advantages to the country because of this tax policy. By the implementation
of this tax policy a lot of people have go the benefits specially the government as they would be
able to increase the GDP of the Australia by 1% and make the economy of the country strong,
for this purpose they have to provide more employment opportunities for the people of country
through which there will be flow of income in the economy which can further help the
unemployed people of Australia to get the jobs. There will be several advantages to the small and
medium businesses as the burden of the taxes have been reduced due to this tax policy and now
they will be able to perform more efficiently as they already will have sufficient amount of profit
with them as the less amount of tax will be reduced. This tax policy has benefited the small and
middle earners or the people to pay less tax and get the additional benefits due to the personal
income tax planning of the government (Australian taxation office, 2019).
There are several disadvantages as well due this policy because for the large companies and the
multinational corporations this policy may not be good enough they will be under the radar of the
government for paying a large amount of taxes, these big are organizations will be added to the
special list of the government as they do not get benefit from these tax policies. Due to several
changes in this tax system the government this may be complex in understanding for the general
people of the country and because of the difficulty in understanding they may not be able to get
the benefits or advantages from these tax policy (Australian taxation office, 2019).
Question 4
Implication on the firm and its client
There can be several implications on the client and the firm as because of the introduction of this
new tax policy there will be a requirement of various changes in the company. It will affect the
operations of the company as it involves operations related to the taxation practice and due to the
changes in the rates and percentage, increase and reduction to the particular sections of the
society the company have to make several changes in its working system and have to revise the
whole process of the operations by the replacing the old rates with the new rates and also by
recording the increase or decrease in the deduction to the particular society. This tax policy has
also affected the clients of the company as their work may have to be done in the old tax rates
manner, sometimes there can be the situation of confusion in the company weather help the
client of the companies with the old tax practice or with the new tax practice. Clients may suffer
if the company adds the new policy of the tax and it will take longer time for the company to
implement and revise such tax practices and the client also have to wait until the company is
ready to do their works. So, sometimes the works of the clients may be stopped in the middle and
have to do again from the starting with the new tax practice which can take longer time. There
can be complexity in understanding the new tax policies for the client as they were familiar with
the old tax practice so in this case after the completion of their works they may not be able to
understand the newly revised work which has been provided to them (Budget, 2019).
4

Question 5
Impact of tax policies on the Australian taxation office
There will be a huge impact on the Australian taxation office as soon as the government
announces the changes in the tax policies. As it will be a huge responsibility for this taxation
department to determine all the new rates and several other changes in the new tax policy made
by the government. They have to revise all the old tax policies and should have to make changes
in the sections specially announced by the governments such as making the separate columns
regarding the amount of tax which have to be paid by the hard-working Australians who have to
pay lower amount of tax, have to make separate column for the tax system of the small business
which have to be reduced and also have to make the separate list of the big organizations and the
multinational companies. During the time of the income tax return date the company has to be
well prepared for the work during that day as they have to collect the money according to the
new tax policies introduced by the government and it will be their responsibility to provide the
fair estimate of the tax collected to the government. The ATO may face problem in the beginning
as it will take time for the organization to understand the new tax policies and determine the
current tax rate for the different sections of the society in Australia. There can be requirement of
the more workers in the company or the fresher students who have studied the new tax policies
as they would be able to perform quickly because of the knowledge about these policies. So, this
new tax policy has made huge impact on the Australian taxation office and they have made the
changes according to the announcement of the government (Australian taxation office, 2019).
5

References
 Australian taxation office, 2019. ATO guidelines and policies. [Online] Australian
taxation office. Available at: https://www.ato.gov.au/General/New-legislation/Latest-
news-on-tax-law-and-policy/ [Accessed: 3 September 2019]
 Australian taxation office, 2019. The latest news on tax and policies. [Online] Australian
taxation office. Available at: https://www.ato.gov.au/General/New-legislation/Latest-
news-on-tax-law-and-policy/ [Accessed: 3 September 2019]
 Australian taxation office, 2019. Overview of key changes. [Online] Australian taxation
office. Available at: https://www.ato.gov.au/Tax-professionals/Prepare-and-lodge/Tax-
Time-2019/Overview-of-key-changes/ [Accessed: 3 September 2019]
 Budget, 2019. Overview glossy. [Online] Budget. Available at:
https://www.budget.gov.au/2019-20/content/download/overview.pdf [Accessed: 3
September 2019]
 Parliament of Australia, 2019. Taxation issues. [Online] Parliament of Australia.
Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/
Parliamentary_Library/pubs/rp/rp0001/01RP22 [Accessed: 3 September 2019]
6