We hear frequent complaints about the amount of tax some of us pay, but also that we desperately need more funding for health, education and aged care. Of course, those services along with roads, infrastructure, defence and many other vital aspects of life are paid for via our taxes. Tax can be viewed as the price of a civilised society.
You may be surprised to know that in international terms, Australia is a relatively low taxing country, around 29th of the 38 members of the OECD.
Money and retirement coach Marc Bineham explains that the government has three main sources of tax revenue: personal income tax which increases the more you earn; company tax and capital gains tax on investments. There is also GST and state taxes.
Personal income tax makes up around 40% of revenue, while company tax contributes around 20%. GST, the goods and services tax, is around 12%.
Marc Bineham points out you can reduce the personal tax you pay through claiming deductions such as work related expenses, donations and the cost of doing your income tax return.
- Australian Government Treasury: Sources of Tax Revenue
- Parliament of Australia: Australian Government Expenditure
- Australian Tax Office: Tax in Australia – What You Need to Know
- The Conversation: Do Australians Pay Too Much Tax, How Australia Compares
- The Conversation: Post-coronavirus, We Need a Working Tax System