Tax Collections to Fall in Australia

November 28, 2011 Taxation in Australia

Tax Revenues in AustraliaCANBERRA – The Australian government is seeing a reduction in collection of capital gains tax, as the European debt crisis maintains its grip on the global economies.

On November 27th the Treasurer of Australia Wayne Swan released a statement describing the economic outlook of the country, with particular emphasis on the revenue forecasts for capital gains taxes.

According to the Treasurer, the prices of Australian stocks are stagnating, or even falling, with the national share market having dropped 15 percent since May this year. Due to the decrease, the government of Australia has lowered its previous forecast for the level of collections of capital gains by AUD 7 billion over the next four years. It is now expected that over the same period collections of personal and corporate income taxes will also plummet, although the full extent has not yet been determined.
The revision of the outlook for capital gains tax collections comes only days before the Treasurer delivers the country’s Economic Statement. It is expected that the Statement will include series of cuts to government spending aimed at compensating for the tax revenue shortfalls.

Shortly after the Treasurer revealed the reduction in the revenue forecast, the Finance Minister of Australia Penny Wong said that any ensuing budget cuts would be similar to the steps taken during the global financial crisis in 2008. She added that the government would be forced to make some difficult decisions that will affect most Australians, saying that “… there are no easy saves left to take.”

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