Essay About Australian Gst And Services Tax

Australian Gst
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Australian GST
The GST (Goods and Services Tax) proposed by the Howard government is a
new tax which plans to add ten percent to the cost of every item
purchased whether it be a car or a pen with only a few exceptions. The
tax set to commence on July 1 2000 may still not become a reality if
the senate does not have a majority vote on the issue. The VAT (Value
Added Tax) of the United Kingdom is much the same tax adding seventeen
and a half percent to all goods and services (although there are
exceptions). This tax is currently in operation in the UK. Differences
between the proposed GST and VAT are not great but there are some
significant differences.
If and when the GST becomes a reality a range of taxes including
wholesale sales tax and provisional tax will disappear when the GST
appears. Daily consumables and services will rise as a result of the
GST. The government is promising to balance the tax by creating
household savings through lower marginal tax rates. The question is,
will this be sufficient compensation? It probably will not be. The
^Aussie battler^ will not be favoured with the GST, as the current
compensation being offered is simply not sufficient. This tax proposal
is yet to be passed by the Senate which means that the GST may not even
become a reality. There may have to be some changes to the GST for it
to be passed by the Senate without another federal election. Some of
these may be food to be exempt from the GST, more compensation for
lower income families, pensioners, etc. Although the government will
receive ten percent of every item sold, not many items will actually
rise by the full ten percent; estim! ated rises for goods and services
will often be significantly lower than ten percent. For example, food
is predicted to only rise four percent. Clothing and footwear will rise
six point eight percent but electrical goods will fall by twenty two
percent because of the current thirty two percent tax which will be
replaced by the ten percent GST. Health and education will be
supposedly GST free, but schoolbooks and uniforms will still attract
the regular GST of ten percent. Childcare will not be taxed, financial
services will be. Renting will not attract a GST but prices are
expected to rise, as landlords will have to pay extra for repairs and
maintenance of properties. The sale of existing homes will not have a
GST placed on them but new homes are expected to rise by four point
seven percent. Council and water rates will be GST-exempt. Cars will
have the GST but cars worth more than sixty thousand dollars will have
a twenty five percent luxury tax. Vehicle registration will be f! ree
and public transport will have a part GST on it which will be less than
the standard ten percent. If the GST becomes a reality it will
certainly have a big impact on society, whether it be for the better or
for the worse.
The VAT is an important method of raising revenue for the government in
the UK. It