Essays on Taxation Reforms in Australia Case Study

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The paper 'Taxation Reforms in Australia" is a good example of a business case study.   The process of taxation is one of the most crucial activities conducted by the central government through the involvement of households and firms (Ricardo, 2014). The desire of states is the creation of a sustainable tax system that will allow the existence of a mutual relationship between the government and the private sector (Melville, 2014). Change is an essential factor that cannot be avoided. In taxation, experts have been faced with the challenge of setting up a system that is sustainable and can adapt to the emerging financial requirements.

Tax reforms in Australia are phenomena that have lasted for decades, but no lasting solution has been attained. The external factors such as economic integration, life expectancy, and international e-commerce have affected the process of making tax decisions. The process of making tax reforms is based on succinct analysis of the current and future expectations in line with the capacity of the inputs of the household and firms. Such an approach is what has proved a complex strategy in Australia is owing to the historical battle of the choice of the tax regime to be implemented (Bajada, 2002).

This excerpt examines the taxation systems of Australia by outlining the effects and contributions of the winners and losers of the process of tax changes. The global classification of the tax reforms can be grouped into three broad categories based on the nature of the implementation process. A revenue improvement may be classified as Revenue Neutral, Decreasing Revenue, or Increasing Revenue (Coleman, 2015). In Australia, taxation reforms have been associated with the principle of neutral revenue.

The tax declaration of John Howard, the Prime Minister in 1997 of his five baselines of the tax changes, depicted his desire for stable tax burden that is not subjected to constant increase (Australian Treasury, 1998). The Australian neutrality regime was favored because of the need for the preservation of equality and the status quo. Such an approach was deemed to be acceptable for the stakeholders and the government. The system provided a safe platform for the surety of government expenditure sources. It was necessary for the country to stabilize the infrastructural development through the revenue collected and the need for a regular and anticipated income was an essential factor for excellence (Oshima, 2010).

It was necessary for Australia to focus on the effect of changes to the existing tax regime through a comparative approach (Evans, 2000; Bucovetsky & Haufler, 2007). The administration could only achieve this through a revenue-neutral scheme that could assist in analyzing the possible increase and decrease of the costs and benefits of taxation (Martinez-Vazquez & McNab, 2000). Although the Australian government has made tremendous changes in the tax regime, the challenge of a system that does not adapt to the global economic change is still lingering within the reforms.

The key objective of the need for a methodology that is flexible and sustainable has been a complicated feature to be incorporated in the changes. The influence of the domestic and global economic reforms and shifts has contributed to the complexity of achieving this objective. The effect of the external forces on the tax economy is important to be included in the strategic approaches of the reforms because they determine the financial performance of the Australian government in the international platforms (Jones & Rhoades, 2014).

The neutrality principle has made the taxation process to be intricate and inefficient. The implementation has been noted to be associated with inequality based on the nature of decision regarding tax administration. The system has been characterized by additional costs with the compliance revenue accounting for about 2% of the gross domestic product. The over-reliance on the tax agents has also contributed to the shortcomings witnessed with the system.

Australia has the highest percentage of the number of taxpayers using the tax agents in the state in the Organization for Economic Co-operation and Development. The administrative costs amount to 3.5% of the collected revenue and exclude the expenditure incurred during the process of policy formation (Tran-Nam, 2004).


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