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Taxation

Taxation. By Meg, Claus, Michelle and Jeremy. GST. The Goods and Service Tax (GST) is a broad –based tax of 10% on the supply of most goods and services consumed in a certain country. Business are burden with the task of collecting the GST for the government

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Taxation

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  1. Taxation By Meg, Claus, Michelle and Jeremy

  2. GST • The Goods and Service Tax (GST) is a broad –based tax of 10% on the supply of most goods and services consumed in a certain country. • Business are burden with the task of collecting the GST for the government • GST is the tax on consumption which overall may encourage savings and investments in productive sales • Cost of doing business is reduced which contributes to lower prices • The consumer is the only real tax payer • The cost of GST is the same for all income earners

  3. The Australian Business Number (ABN) • The Australian Business Number is a single identifying number that a business uses when dealing with government departments and agencies. The ABN allows the business to participate in the GST system. If a business does not have a ABN tax at the rate 48.5 % can be withheld. This is known as a withholding tax. • Withholding tax can be avoided through the quoting of ABN on an invoice for the supply of goods and services.

  4. Local government rates and charges • The government uses property taxation of land. The income collected from the property taxes are use to provide better facilities to the community / maintain. In some occasions the local government will reduce the taxation to encourage people to establish new business. • An example of income sources would be water and sewerage, and development and building approval fees

  5. Short answer Questions • Discuss the impact of GST on a business and the consumer? • Discuss why failing to have an ABN may affect a business?

  6. Answers • As GST on applies to consumption and not savings or investments, consumers may be encourages to save resulting in investments on productive sales • ABN is a single identifying number used when dealing with government departments and agencies, without obtaining and ABN number, tax at the rate of 48.5 per cent can be withheld. To avoid this quoting of an ABN on invoices for the supply of a good or service

  7. Glossary • Goods and service tax (GST): A broad-based tax of 10 per cent on the supply of most goods and services consumed in Australia. • Input tax credit: An allowable tax deduction that a business can claim for any GST included in the price of business inputs. • Business activity statement (BAS): Records a business's claim for input tax credits and accounts for GST payable. • Australian business number (ABN): A single identifying number that a business uses when dealing with government departments and agencies.

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