The Australian Tax Office

The Australian Tax Office:

The website of the Australian tax office provides information which is useful for all companies and individuals obliged to comply with Australian taxation regulation. The tax office is the principle organisation responsible for collecting tax revenue on the government’s behalf. It operates under the auspices of the Department of Treasury and answers to the Treasurer. In the main, the Tax Office implements the directives of the Treasury, and is not responsible for economic policy recommendations or research. It does however undertake some research into the effectiveness of various initiatives, such as compliance recommendations.

Australia operates a “Pay as you go” (PAYG) system of tax collection for employees. That is, employers are responsible for deducting income tax in compliance with current tax rates as specified by the ATO, and paying these to the ATO on behalf of employees. Australia has a progressive income tax system, whereby marginal tax rates increase as income increases. Increasing marginal taxes also mean average taxes increase as income increases. Australian employees also submit an annual tax return, in which they may claim additional deductions against tax already paid. In many instances this will result in a return of some tax income already paid.

Like many developed Western countries with progressive tax income tax systems, significant resources are directed towards “tax minimisation”. Australians seek to decrease their taxable income through deductions against tax paid, in the hope of a tax return. Although the Tax Office utilises a system of self assessment for individual tax payers, random audits tend to act as an effective deterrent to tax cheating.

Talking it over and thinking it through

1. Go into the ATO’s website and find the tax rates for individuals. List the current marginal tax rates and the corresponding income levels at which they are introduced.

2. Find out about careers with the ATO.

Suggested Answers:

1. Under the heading “What do you want to do?” in the left hand column of the Tax Office’s homepage click on “Find a rate or calculator” and then “Individuals and families”. From here you will be able to find current income tax rates.

The tax rates for 2009-10 are as follows:

$0 – 6,000 Nil

$6,001 – 35,000 15c for each $1 over 6,000

$35,001 – 80,000$4,350 plus 30c for each $1 over $35,000

$80,001 – 180,000 $17,850 plus 38c for each $1 over $80,000

$180,001 and over$55,850 plus 45c for each $1 over $180,000

2. Click on the “Careers Centre” tab at the top of the webpage to find out about career prospects for business graduates at the ATO.