Austrailian GST Essay Research Paper The GST — страница 2

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GST is different to the VAT as with the GST you must pay tax on both goods and services but with the VAT you only have to pay tax on the goods you buy and not the services directly although the service suppliers may charge a premium because of the materials they must purchase. Here is a table displaying the amount of tax on a variety of different goods. The table will probably be quite similar to a certain extent if the GST becomes a reality in Australia: (all figures in pence)pricedutyVATtotaltax as a % of price Cigarettes336214.750264.778.8 Wine305108.545.4153.950.5 Whisky1149547.7171.1718.862.6 Beer (pint in pub)16624.724.749.429.8 Petrol (per litre)6945.110.355.480.2 There are two main types of indirect tax in the UK. There is only one in Australia currently, which is the

per-unit tax which is where the amount charged is always the same on each unit. An example of this would be duties on alcohol or cigarettes. The other type is and ad-valorem tax which is where the tax is charged as a percentage of a good, this is what the VAT is in the UK, as it is always charged at seventeen and a half percent. As you can see, the VAT is much more easily analysed as it is already in action in the UK and GST has not yet been approved in Australia. Both of these taxes are indirect as well as regressive (a tax that represents a smaller proportion of a person^s income as their income rises. In other words the average rate of taxation falls). This does not support Adam Smith^s theory that taxes should be linked to ^ability to pay^. It is obvious that these taxes will

hit less well-off people harder than the better-off, which is why compensation is required to reimburse these people after they have paid a GST or VAT. Overall, the taxes appear to be quite similar besides the fact that the VAT is seven and half percent more than the GST, although the GST may rise after a period of time if it becomes a reality. SOURCES: