Australian Gst

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