International Tax Comparison

How do Australia’s taxes stack up against other countries?

That’s what the Treasury wanted to know as well so they commissioned a report in 2006 titled ” International Comparison of Australia’s Taxes” to compare the tax revenue of Australian to a number of other OECD (Organisation for Economic Co-operation and Development). 

The report found the following broad conclusions:

Australia has a low tax burden, both currently and historically

In 2003, Australia had the eighth lowest tax burden of the OECD-30 countries and has typically ranked in the bottom third of countries for the period since 1965.

Australia’s tax burden as a proportion of GDP is 31.6 per cent.

Australia’s tax mix is broadly consistent with other countries’, although there are some distinguishing features.

Australia raises the majority of its taxation revenue, 60.9 per cent, from direct taxation levied on incomes and payrolls. The remaining 39.1 per cent of Australia’s taxation revenue is derived from indirect taxation — including the goods and services tax, excise and customs duty, and property taxes.

Australia’s tax burden on individuals and payrolls (14.0 per cent of GDP) is significantly lower than the OECD-30.

Australia has a relatively high company tax burden. It is the third highest at 5.3 per cent of GDP, compared with the OECD-30.

Australia’s tax mix has a significantly lower reliance on value added and sales taxes (4.3 per cent of GDP) than the OECD-30 unweighted average (6.8 per cent).

Australia has a relatively greater reliance on immovable property taxes (1.4 per cent of GDP) and transaction taxes (1.6 per cent) than the OECD-30 average (0.9 per cent and 0.6 per cent respectively). Transaction taxes are a significant revenue source for Australia’s state governments.

Whilst this report was compiled in 2006 and therefore is not completely up to date, it does give us an indicator of where Australia taxes rank in the comparison to other well developed countries.  If interested in further data, follow the link below.

Gillian Holzberger – Senior Accountant