Taxation - Final exam notes

Description

Notes on all the content outlined in taxation for sem 1, 2020 final exam. Definition of Taxation - ‘Compulsory contribution to the support of the government, levied on persons, property, income, commodities, transactions, etc.’ - Tax are also called: o Duties o Levies o Tariffs o Charges - Taxpayers are compelled by law to pay taxes even though they may not necessarily receive any direct benefit from it. - GST was introduced in Australia in 2000 Functions of Taxation - Revenue raising function o Redirects resources from citizens to government o Provides government with revenue for use in its spending programs - Social and political functions o Used to promote government objectives  Tax incentives – encourage certain behaviour  Tax burdens – discourage certain behaviour - Economic Functions o Modifies consumer behaviour  Higher taxation leads to less spending  Lower taxation leads to more spending - Redistribution function o Redistributes wealth among citizens