Taxation Law: Superannuation Taxation History, Objectives & Amendments

This report provides an overview of superannuation taxation in Australia, focusing on its objectives, history, and recent amendments. The taxation of superannuation occurs at three stages: contribution, investment income, and benefits. The tax rates vary based on factors like pre- or post-income tax contributions, high-income status, and exceeding contribution caps. Introduced in 1992, the superannuation system aims to encourage savings for retirement, channeling money into the market for economic and community benefits while also serving as a revenue-raising measure. Recent amendments include reductions in annual concessional contribution caps, increased income threshold limits, and changes to pension and preservation ages, all aimed at improving economic management and employee benefits. Desklib offers a wealth of similar resources for students.

TAXATION LAW
1

Contents
Presentation component Part B:.................................................................................................3
1. Discuss briefly this part of Taxation Law and its objective. Here you can include
discussions of revenue raising; economic or community benefit, equity and efficiency
amongst others...........................................................................................................................3
2. Discuss briefly the history of this tax measure. Discuss any important amendments
including any recent amendments..............................................................................................4
References..................................................................................................................................5
2

Presentation component Part B:
1. Discuss briefly this part of Taxation Law and its objective. Here you can include
discussions of revenue raising; economic or community benefit, equity and
efficiency amongst others.
Taxation of Superannuation:
In accordance with Australia taxation law system, the tax over superannuation is paid at three
stages firstly, when the contribution is received secondly when any form of investment
income is earned and thirdly when any form of benefit is earned by the fund. The tax rates
and types are different for different types of superannuation. The criteria on which taxation
on superannuation depends are whether the contribution is made before or after payment of
income tax is a high-income earner, an excess of the fund over super contribution cap
(Australian government, 2018).
The objective of taxation of superannuation:
Superannuation funds have been formulated with a view to encouraging masses to save an
amount from the earnings for their retirement purposes. This is also a great measure for
making savings and channeling money into the market. Thus, superannuation funds are
implemented for overall economic and community benefits.
Taxation over superannuation’s funds also acts as a measure of revenue rising. Since,
superannuation funds are a compulsion for all types of employees and contractors, this source
of financing provides a large amount of revenue for the taxation authorities. This is indirectly
useful for economic efficiency and equity distribution among rich and poor people. Thus, it is
highly beneficial for overall society. Also, this is a good measure of reducing the gap
between rich and poor by taxing more to rich people than to poor people (Australian
government, 2018).
3

2. Discuss briefly the history of this tax measure. Discuss any important amendments
including any recent amendments.
History of tax measure:
Superannuation taxation system was initiated in 1992 in Australia. It was initiated in the
Keating Labour government and the contribution from an employer has become a vital
concept for all. Initially, it was mandatory for all employees who come under awards and
thus, all the employees were not covered the under the plan. Since, the number of
changes has been made in the superannuation taxation measure with a view to make it
more equitable and effective (Australian government, 2018),
Recent amendments to tax measure of superannuation funds:
Many of changes have taken place in superannuation funds in recent time. Some of the
changes are there is reduction in the annual concessional contribution cap when reduced
$25,000, there is an increase in the income threshold limit which is $37,000, a new
concept of total superannuation balance has been initiated etc., pension age has increased
to minimum of 65.5 years and preservation age has increased to 57 years. The varied
changes are done in the superannuation funds with respect to understanding and better
economic management in the country (Australian government, 2018). There are certain
things which have not changed such as rate of super contribution is still 9.5% and for the
people of age above 60 will not have to pay any form of tax. Thus, overall it is formed for
the betterment of employee benefits and employer responsibility.
4

References:
1. Australian government, 2018. Superannuation. [Online] Australia.gov.in. Available
at: https://www.australia.gov.au/information-and-services/money-and-tax/
superannuation. (Accessed as on: 26th January, 2018).
2. Australian government, 2018. Super. [Online] Australia.gov.in. Available at:
https://www.ato.gov.au/Individuals/Super/. (Accessed as on: 26th January, 2018).
5