Tax: who, what, how and why

Step 1 of 3

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 22

    The changeover to decimal currency in 1966 created a massive amount of work for the ATO. In NSW alone, staff manually converted 200,000 accounts worth $450 million.

Self-assessment

Australia's tax system works on self-assessment. When a taxpayer completes their income tax return, they must show all of their income and only claim allowable deductions and tax offsets to which they are entitled. The ATO issues a notice of assessment based on the information provided in the tax return.

read more glossary terms