In a boost for international efforts to strengthen co-operation against offshore tax evasion, seven new countries have joined the agreement to exchange information automatically under the OECD/G20 standard.
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Australia has the 7th lowest tax wedge among the 34 OECD member countries. The average single worker in Australia faced a tax wedge of 27.7% in 2014 compared with the OECD average of 36.0%.
This review particularly recommends shifting away from income taxation to indirect taxation, for instance by raising more revenue from the Goods and Services Tax.
The government’s current review of the federal system, focusing on both spending and tax responsibilities, is welcome, as is the “whole of government” approach to the process.
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The tax burden in Australia increased by 1 percentage point from 26.3% to 27.3% in 20121. The OECD average was an increase of 0.4 percentage points from 33.3% to 33.7%. The Australian standard GST rate of 10% is one of the lowest in the OECD. The average VAT/GST standard rate in the OECD was 19.1% on 1 January 2014.
The G20 needs to go structural, social, and green! With fiscal and monetary policy room nearly exhausted, structural reforms are the best choices, sometimes the only choice. The OECD battle cry in this regard has been unchanged since 2008: “go structural!”.
Bilateral Agreements that have been signed to establish exchange of information for tax purposes.
This report summarises the legal and regulatory framework for transparency and exchange of information for tax purposes in Australia.
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Agreement between Australia and Marshall Islands for the exchange of information relating to tax matters
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Agreement between Australia and Vanuatu for the exchange of information relating to tax matters