Taxation Law: Tax Governance Issues Assessment Answer

) mentioned that strict rules and legislations mainly help in gathering a higher tax from individuals and companies. However, James et al. (2015) argued that some companies use auditors to indentify loopholes in taxation and accoutring policies to reduce their overall tax. In addition, the overall tax and transfer system mainly helps in identifying the adequate tax amount, which needed to be paid by individuals and companies.   

Furthermore, the complex tax and transfer system also helps in limiting the unethical practises, which in turn increases the overall tax collection from Australian citizens. Moreover, the current system used by the Australian government mainly helps in identifying specific tax for each items and income, which needs to be paid by corporate. Koethenbuerger (2014) cited that increased efficiency of the tax system mainly helps in reducing loopholes used for tax evasion. Nevertheless, Stokes and Wright (2013) criticises that complicity of tax transfer system mainly reduces user friendliness of the software and affects the overall acculturation of tax.    

The main aim of the current Australian tax and transfer system is to provide relative details about the different types of tax, which needs top paid by the corporate and individuals. In addition, the system mainly aims in being user-friendly by accommodating all the policies that are being adopted by the Australian government. However, increased policies and division in different types of tax mainly increases the overall time to deliver the adequate tax, needs to be paid by the user. Fletcher and Guttmann (2013) argued that increased completion time might also raise the overall traffic and might freeze the whole tax transfer system resulting in losses for the government. On the other hand, Heferen et al. (2013) mentioned that with the help of adequate servers and new technology governments are able to reduce system freeze.   

In addition, with the help of current policies and tax transfer system Australian government is able to promote tax equality among its citizens, which might help in generating high tax revenue. Moreover, the system effectively provides details about the tax slab, rebate, and provisions, which could be helpful in maintaining tax equality among citizens (Taxreview.treasury.gov.au 2016). In addition, the system also helps in segregating capital expenditure to provide an adequate levy for companies to reduce excessive tax pay. Rimmer et al. (2014) stated that identification of effective tax isolation mainly helps individuals to evaluate their expenses conducted in the fiscal year.     

Moreover, the overall proper levy of tax mainly helps in generating revenues from individuals by providing tax on different types of income. The proper levy of taxing system reduces the loopholes, which might be used by companies to decreases their tax payout. Valenzuela et al. (2014) mentioned that strict rules and regulations effectively help in reducing loopholes and increase overall cash inflow of the government. However, Evans (2012) criticises that increased implementation of policies and rules mainly have a negative affect the tax transfer system and might decrease its overall efficiency.

Describing the overreach and overburden Australian tax system currently being used by the taxpayers in Australia:

In addition, in Australia the tax system is very complicated due to the changing policies and implementation of the new rule in overall taxation. In addition, the taxation system comprises of sub heading and sub adjustment, which could not be effectively adjusted by the current tax transfer system used in Australia (Taxreview.treasury.gov.au 2016). In addition, the overall complexity mainly lies within its Vat and Service tax imposed by the Australian government. In this context, Creedy and Herault (2015) mentioned that with the help of effective adoption of one type of taxation system could eventually reduce the overall burden on the tax transfer system used by governments.   

In addition, the overall statutory tax rate that is currently being used in Australia is not effective and does not help in improving the adjustment conducted on withdraws or transfer. This limited approach of the system mainly reduced the ability of the current tax transfer system used in Australia. Tran‐Nam and Evans (2014) mentioned that with the help of adequate tax structure governments are able to minimise unethical tax evasion and increase their cash inflow.

The overall GST system mainly comprises of different types of layers with limits and rates, which is currently decreasing the efficiency of the current tax transfer system. Whiteford (2010) mentioned that complicated adjustment system might confuse the overall end user and overburden the tax transfer system. Moreover, Australian government to increase taxes from business is using the current complicated GST system. In addition, the GST system mainly comprises of different levels tax rate, which mainly helps in maintain tax equality (Taxreview.treasury.gov.au 2016).     

The overall increase in technology has mainly increased the number of service providers in Australia and significantly changed the tax system. The increase in technological pace has also increased the cultivation of policies and adjustment, which could be used in the tax system to maintain tax equality. This increased policies and adjustment has mainly complicated the tax transfer system, which in turn increase the overburdening of the system. Mangioni (2016) argued that without regular updating of software and hardware components the tax transfer system may lose its friction and might freeze during transactions.   

In addition, the major part of the taxes is mainly generated from payroll policies that are being adopted by the Australian government. Moreover, the strict payroll schemes and policies in different level have mainly complicated the overall tax transfer system. In addition, complicated tax transfer systems mainly overburden the servers and increases traffic. Moreover, the Australian government uses territorial payroll taxation system but has only one tax transfer system. Thus, the complexity of the payroll calculation is mainly affecting the tax transfer system used by the Australian government. In this context, Golladay and Haveman (2013) suggested that governments with help of territorial taxes are able to effectively distribute its population and use the available natural resources.     

In addition, the overall tax transfer system due to security reasons uses ideal logout system. Moreover, the tax transfer system mainly logouts the users from the system if the system is ideal for some time. This security measures in mainly frustrating and increases the number of users at single time. According to Herault and Azpitarte (2015), an effective security measures could eventually help in reducing hackers from gaining accesses to the tax transfer system. On the other hand, Mangioni (2016) criticises that a complicated security system could reduce users satisfaction level and might increase transaction completion time.

Effectively recommending a rationalised tax and transfer system that could be used in Australia to overcome identified shortcomings:

Currently the overall tax and transfer system that is being used in Australia is in turmoil and is not producing the required level of output. Furthermore, the complexity of the tax transfer system is mainly depleting the overall satisfaction level of the taxpayers and increasing burden on the system. Moreover, with the help of figure 2, the overall number of taxes, which is imposed by the Australian government, could be effectively evaluated. Furthermore, these taxes have different level of limitation and rate, which is negatively affecting the tax transfer system (Taxreview.treasury.gov.au 2016).    

Moreover, the following measure could be taken by the Australian government to reduce the shortcomings of their current tax and transfer system.

In addition, the current hardware system that is being used by the Australian government could be improved by increasing the number of servers and traffic. In addition, the improvements of hardware technology could help in accommodating the increasing number of users currently accessing the tax transfer system used in Australia. Furthermore, with advanced servers and adequate connectivity the tax transfer system could be effectively improved, which in turn might reduce overall burden on system. In this context, Whiteford (2014) mentioned that use of latest technology mainly helps in reducing glitches from the software, which in turn decreases the overall wait time of the users.

Moreover, the software update could also help the tax transfer system that is being used by the Australian citizens. In addition, the Australian government could effectively implement latest software and user-friendly accessibility to design the new tax transfer system, which might help in reducing the overburdening of the system. Koethenbuerger (2014) cited that use of latest software technology mainly helps in increasing the user-friendly approach of the software. However, James et al. (2015) criticises that increasing number of users and complicated security system might hamper the overall traffic of the software         

Furthermore, the Australian government could effectively uses mobile and tablet application with the current website system to increase the efficiency of the overall tax transfer system. Moreover, inclusion of mobile application could eventually help in reducing the overall traffic on the website and could increase user-friendly approach of the tax transfer system. Fletcher and Guttmann (2013) suggested that use of mobile application mainly helps in connecting the users directly to the servers without the access of any portal.  

In addition, the Australian government could also reduce the overall policies and implement a one-tax rule on payroll and income tax system. Moreover, the one tax rule will help in reducing the sub divisions in payroll that needs to be accommodate in the tax transfer system. Furthermore, reduction in subsection could eventually help in uncomplicating the current system and improve its efficiency. Stokes and Wright (2013) stated that simplistic software approach mainly help in improving satisfaction level of the end user. However, Rimmer et al. (2014) argued that increased simplicity of the software might not be able to provide the required level of productivity needed from a tax transfer system.

Conclusion:

The overall study mainly helps in evaluating the current inefficiency of the tax transfer system used in Australia. Moreover, the novice effectively evaluates different types of policies and its affect on the overall tax transfer system. In addition, the multiple policies that the current tax system tries to achieve are effectively evaluated in the study. Furthermore, the novice effectively depicts how the current tax paying system is being overburdened by the changing policies. Lastly, the novice effectively depicts the tax transfer architecture, which could be used by the Australian government to reduce overburden on the Tax system.

Reference:

Creedy, J. and Hérault, N., 2015. Decomposing inequality changes: Allowing for leisure in the evaluation of tax and transfer policy effects. Fiscal Studies,36(2), pp.157-180.

Evans, C., 2012. Tax Governance Issues: Managing System Complexity.Economic Papers: A journal of applied economics and policy, 31(1), pp.30-35.

Fletcher, M. and Guttmann, B., 2013. Income inequality in Australia.Economic Round-up, (2), p.35.

Golladay, F.L. and Haveman, R.H., 2013. The economic impacts of tax—transfer policy: Regional and distributional effects. Elsevier.

Heferen, R., Mitchell, N. and Amalo, I., 2013. Tax policy formulation in Australia. Economic Round-up, (2), p.1.

Herault, N. and Azpitarte, F., 2015. Recent Trends in Income Redistribution in Australia: Can Changes in the Tax‐Benefit System Account for the Decline in Redistribution?. Economic Record, 91(292), pp.38-53.

James, S., Sawyer, A. and Wallschutzky, I., 2015. Tax simplification: A review of initiatives in Australia, New Zealand and the United Kingdom.eJournal of Tax Research, 13(1), p.280.

Koethenbuerger, M., 2014. Competition for migrants in a federation: Tax or transfer competition?. Journal of Urban Economics, 80, pp.110-118.

Mangioni, V., 2016. De-siloing and defining recurrent land tax revenue in Australia. Australasian Journal of Regional Studies, 22(1), p.58.

Rimmer, X., Smith, J. and Wende, S., 2014. The incidence of company tax in Australia. Economic Round-up, (1), p.33.

Stokes, A. and Wright, S., 2013. Does Australia Have A Good Income Tax System?. The International Business & Economics Research Journal (Online), 12(5), p.533.

Taxreview.treasury.gov.au. (2016).Architecture of Australia's tax and transfer system. Available From: https://www.taxreview.treasury.gov.au/content/Paper.aspx?doc=html/publications/papers/report/section_2-01.htm [Accessed on 8 Aug. 2016].

Tran‐Nam, B. and Evans, C., 2014. Towards the development of a tax system complexity index. Fiscal Studies, 35(3), pp.341-370.

Valenzuela, M., Lean, H.H. and Athanasopoulos, G., 2014. Economic inequality in Australia between 1983 and 2010: a stochastic dominance analysis. Economic Record, 90(288), pp.49-62.

Whiteford, P., 2010. The Australian Tax‐Transfer System: Architecture and Outcomes. Economic Record, 86(275), pp.528-544.

Whiteford, P., 2014. chapter 3 Australia: inequality and prosperity and their impacts in a radical welfare state. Changing Inequalities and Societal Impacts in Rich Countries: Thirty Countries' Experiences, p.48.