Tax: who, what, how and why

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Types of taxes and charges

Taxes can only be collected if a law has been passed to permit their collection.

The Commonwealth of Australia Constitution Act established a federal system of government when it created the nation of Australia in 1901. It distributes law-making powers between the national government and the states and territories.

Each level of government imposes different types of taxes and charges. During World War II the Australian Government took over all responsibilities for income tax and it has remained the major source of federal tax revenue ever since.

Levels of government and their taxes

Level of government

Taxes that can be raised

Federal

Income tax

Medicare levy

Company tax

Goods and services tax (GST)

Fringe benefits tax (FBT)

Capital gains tax (CGT)

Customs duty on imports

Excise on fuels, tobacco and other goods

Departure tax at airports

Petroleum resource rent tax

Special purpose levies

State or territory

Payroll tax

Stamp duty

Land tax

Special purpose levies

Taxes on gambling

Local

Property rates

Rubbish disposal charges

Building permits

Fines

Animal licences for pets

 

  • Fact 12

    The expenses of World War I were so great that the Commonwealth Government introduced three new taxes in 1917: an entertainment tax, a wartime profits tax and a bachelor tax that raised such a bitter protest that it was never put into operation.

Gross salary

The amount of money earned by an employee before any deductions are taken into account.

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