Question

What type of system is the Australian income tax system?

When is an income tax year?
When are tax returns due?
Explain how tax is collected in advance of the due date.
How long must people keep their tax records after they lodge their returns?

Answer 1

The Australian income tax system is a progressive tax system. Tax returns are due by 31 October. Tax in Australia is collected in advance through the PAYG system. People must keep their tax records for at least five years after lodging their tax returns.

Step-by-step explanation:

The Australian income tax system is a progressive tax system. This means that the tax rate increases as the income increases. An income tax year in Australia is the period from 1 July to 30 June. Tax returns are generally due by 31 October, but if you have a tax agent, you can lodge your tax return later.

Tax in Australia is collected in advance through a system called Pay As You Go (PAYG). This means that employers withhold a certain amount of tax from their employees' wages and remit it to the Australian Taxation Office (ATO) on their behalf. This ensures that individuals are paying tax throughout the year rather than in one lump sum at the end of the financial year.

People in Australia are required to keep their tax records for at least five years after lodging their tax returns. It is important to keep records of income, deductions, and any supporting documentation in case of an audit by the ATO.