As tax is the only source of revenue
of the government therefore, it is the responsibility of every citizen of the
country to pay their tax obligations to the government appropriately and
honestly. The citizens of the country pay the taxes as a cost of the services
provided by the government such as security, transportation, medical, education
etc. For this reason the citizens of the country should acquire some knowledge
about the tax laws, policies, rules and regulations that help them to pay the
tax obligations in an efficient manner.
The following study provide a brief knowledge about the tax rules and
regulation that should be followed by the citizens to calculate their tax.
|
Particular
|
Amount
|
Amount
|
|
Salary
|
$42000
|
|
|
Income from business
|
$30000
|
|
|
Transportation allowance
|
$2000
|
|
|
Received of an Outstanding income
|
$3000
|
|
|
Income of Jones's wife
($17500+$25000)
|
$42500
|
|
|
Income from shares
|
$1000
|
|
|
Total income from Jones
|
$120500
|
|
|
Annual expenditure of the Jones
|
|
|
|
Mortgage expenses
|
$37000
|
|
|
Expenses on sale of shares
|
$100
|
|
|
Total expenditure of Jones
|
$37100
|
|
|
Total assessable income
|
|
$83400
|
The calculation of the assessable
income of the Jones should be on accrual because Jones use different kinds of
services for his clients for which he did not pay single penny. The value of
such services should be included in the calculation of the assessable income
for Jones. As the income of the Jones are coming through different sources such
as salary, business, wife’s salary etc therefore all incomes of the Jones are
ordinary income[1].
The assessment of the income of the Jones should be done under the Income Tax
Assessment Act 1936 subsection 6(1). The Income tax act 1961 section 115BB
should be used to treat the income from the quiz show. As income from the share
is a capital gain for Jones therefore, the tax should be calculated under the
Capital gain tax[2].
The digital currencies should
fulfill the following criterias:
A) The currency should be intangible
and account of the currency should be done in digital.
B) The currencies can not be convert
in the other currencies[3].
C) The currencies should be used as
a medium of exchange in the world.
D) The currencies can be converted
in the real world only in two ways the first one is buying of
goods and services and the other way
is to buy the fiat currency.
E) Use of cryptographic techniques
to validate the transactions.
F)
The centralized control and centralized validation should be
unorganized.
Australian government use GST to
calculate the tax for the Digital currencies. The tax treatments are as
follows:
Input taxed treatment: The digital currencies should be
treated as tax inputs such as exchange of foreign currency, loans, share
trading etc.
Treating digital currencies as money: In this treatment the digital
currencies should be treated by the assessor as money. According to this
treatment the digital currencies are equivalent to the Australian and foreign
currencies, bills of exchange, promissory notes etc.
Rules and regulations for using the
digital currencies for tax treatment:
A) The taxpayers should be
registered with the Australian government to use the digital currencies as
money.
B) The taxpayers should disclose all
the relevant information about the sources and use of digital currencies. The
information provided by the taxpayers should be accurate, consistent and clear.
If the taxpayer conceal some important information about the digital currencies
therefore, the government can take some actions against the taxpayer.
C) The taxpayers have to provide
some relevant information such as Date of transaction of digital currencies,
amount of digital currencies in the Australian
currencies etc.
In this ways the government can
calculate the tax on digital currencies[4].
The following tax consequences can
be faced by Allan to calculate the tax obligations:
A) Allan should pay tax if his
aggregate agricultural income is exceeds of $5000.
B) Detail information about the
agriculture activity should be provided by Allan to government to maintain the
transparency in the tax obligations[5].
C) Allan also have to pay the
taxes for the use of fuel, luxury car, fringe benefit tax and
small business entity tax.
The implications of tax on the Allan
and Betty depends on the income from the agriculture. Therefore, the total
income of the Allan and Betty is
($360+$500+$600)= $1460. As the income of the Allan and Betty is lower than the
$5000 therefore, they have no requirements to pay the tax obligations to the
government.
Barter Scheme:
According to the Barter scheme Allan
and Betty get different types of exemptions and deductions from the government
in the tax obligation. The Barter scheme continuously motivate Allan and Betty
to do their firm activity in Australia[6]. The barter scheme also provide some important
resources such water, fertilizer, power, heavy vehicles that help the Allan and
Betty to do their firm activities in an efficient manner. Allan and Betty also
get some government grant as a capital to purchase the seeds for the firm
activity[7].
After the of the whole study the
citizens of Australia has to on\bey some rules and regulations to calculate
their tax obligations. The payment of
the taxes also very important for the government of Australia as it is the only
source income of them. Government can
ease tax regulations to increase the number of taxpaying citizens and increase the revenue of them.
Government also can provide some award to the citizens to motivate them for tax
payments[8].
[1] Sackman, J., Van Brunt, R., Rohan, P. J., & Reskin, M.
(2016). Tax Issues in Condemnation Cases (Vol. 7). Nichols on
Eminent Domain.
[2] Kirsch, M. S. (2014). Revisiting the Tax treatment of citizens
abroad: reconciling principle and practice. Fla. Tax Rev., 16,
117.
[3] Reforms, U. D. T., Kleven, H. J., & Schultz, E. A. (2014).
Estimating taxable income responses using Danish tax reforms. American
Economic Journal: Economic Policy, 6(4), 271-301.
[4] Hoynes, H., Miller, D., & Simon, D. (2015). Income, the earned
income tax credit, and infant health. American Economic Journal:
Economic Policy, 7(1), 172-211.
[5] Dreßler, D., & Overesch, M. (2013). Investment impact of tax
loss treatment—empirical insights from a panel of multinationals. International
Tax and Public Finance, 20(3), 513-543.
[6] Chen, S. X. (2017). The effect of a fiscal squeeze on tax
enforcement: Evidence from a natural experiment in China. Journal of
Public Economics, 147, 62-76.
[7] Feldman, N. E., & Ruffle, B. J. (2015). The impact of
including, adding, and subtracting a tax on demand. American Economic
Journal: Economic Policy, 7(1), 95-118.
[8] Heider, F., & Ljungqvist, A. (2015). As certain as debt and
taxes: Estimating the tax sensitivity of leverage from state tax changes. Journal
of Financial Economics, 118(3), 684-712.
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