At the end of the nineteenth century each of the six Australian colonies had distinct tax systems, which were almost entirely reliant on customs and excise duties.
Consistent with most industrialised countries, Australia’s tax take (measured as the tax to GDP ratio) grew significantly over the twentieth century, in line with the expanding role of government . At the time of Federation Australia’s tax to GDP ratio was around 5 per cent. . Between the two World Wars, government expenditure and tax revenues grew significantly and by the beginning of the Second World War, Australia’s tax take was over 11per cent of GDP
Between 1915 and 1942, income taxes were levied at both the state and federal level, leading to complexity and inequitable taxation of income across states. The Second World War saw fundamental changes to Australia’s taxation system.
By the end of the Second World War, taxation revenue had grown to over 22percent of GDP. The further increase in taxation largely reflected Australia’s involvement in the war and the introduction of government support programmes, such as the widows’ pension in 1942 and unemployment relief in 1944.
Tax revenues tended to fall in the middle of the twentieth century and by 1963-64 the tax take was around 18 per cent of GDP. It then increased significantly between 1973 and 1975, largely as a result of increased funding for social programmes. There has since been a modest rise in Australia’s tax take, similar to the experience of many other OECD countries. Nevertheless, Australia’s tax to GDP ratio is currently the eighth lowest among the 30 OECD countries.
By the time of Federation in 1901, Australia had evolved from frontier-style penal and migrant settlements to a modern economy with growing urban and rural populations, rising wealth, and demand for a greater role for government.
Social and demographic changes led to corresponding changes in taxation. Formerly dependent on hidden and regressive indirect taxes such as customs and excise duties, late in the nineteenth century the colonies began to introduce direct, progressive taxes on land and income. The rate of change to the tax bases varied between the colonies according to their stage of development.
By Federation many of the colonies had introduced income taxes, each with their own definition of assessable income and different rates applying to differing categories of income. . This situation became problematic following Federation due to increasing population and capital mobility between states.
. The federal government rates were low and cut in at a high income threshold, minimising double taxation. Following the war, the federal government continued to impose income tax, meaning that two tiers of government were sharing, and competing for revenue from, a common taxation base.
Northcity Accountants Tax Agents , part of the 55,000 Tax Agents administered by The Tax practioners Board & Australian Taxation Office.
The Tax Administration in Australia is aimed through Tax Agents to all Australians to Pay theit fair share of tax.
Tax Agents are the Guardian Angels of the Australian Tax system.