Tax System

Running head: Australian Taxation System

Australian Taxation System

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ABSTRACT

Taxation is an indispensable right of the state over its citizens. This paper will discuss the interpretation of the judicial branch and the government of the particular provision of taxation. This will also present the cases where the court laid down its interpretation on the said provision.

AUSTRALIAN TAXATION SYSTEM

Taxation has been recognized as a right of the state to enforce upon its citizen’s income, properties, business and others. I t is an essential function of the government in order that the state may live. Moreover, it is the means whereby the government’s services and public facilities are made available to the people.

In Australian Taxation System, citizens are required to pay taxes and other charges at federal, state, territory and local government levels in order to fund a range of government programs and community services (Australian,gov, 2008). It also uses the individual “self- assessment” principle in its taxing system (Australian,gov, 2008). In addition, the Commonwealth Income Tax Assessment Act 1936-1941 has been enacted as a guide in assessing the taxable income of its citizens ([1944] HCA 18; 69 CLR 235). However, it has disputable provisions that is the subject of the cases at bar, McCauley v. Federal Commissioner of Taxation ([1944] HCA 18; 69 CLR 235) and Stanton v. Federal Commissioner of Taxation ([1955] HCA 56; 92 CLR 630).

In the first case, the court decided that the money being disputed was taxable being a royalty. Before going any further, it is good to discuss the case in brief. McCauley, who owns a certain land with growing trees, entered into an agreement with Thomas Laver whereby the latter would purchase the growing timber on the land of the former ([1944] HCA 18; 69 CLR 235). The agreement further...