Megan Case Study on Australian Mining Company

Megan Case Study on Australian Mining Company

In the total case of Megan, it is observed that she was a mining engineer. She worked in Australian mine company. She earned a good amount that is $180,000 gross throughout a year from this company. She also got the good amount, $20,000 for senility. Some late reason she agrees to work for the company for a certain time with a good one off payment of $75000. One can understand from the scenario that Megan was multitalented woman .She has the capability, excellence to do various kinds of job. She lusts for good earning. Therefore along with mining company job she also does freelance activity for many other companies and earned  huge amount of $5,000 and rewarded with vintage champagne which worth $1,800.

It is also observed that she has also designed a mining good along with an engineering specialist. This designing skill brings $440,000 for her. This picture shows that she has the knowledge and skill about machine, tool designing. Hence again Megan has shown her talent. She has performed a landscape painting. This painting again proved her talent. This painting brings recognition for her. Therefore, she has earned $22,000 for her painting and art industry representative rewards her handsomely with $33,000.

Thus, Megan’s total income throughout a year comes to a huge amount. She saves the big amount of money from different work field for her present and future expenses. She has to give hard labour, her valuable time to achieve such a handsome amount. She wants to enjoy her life with her earnings. She is willing to give big tax amount from her earnings. Actually, she has no intention to give tax in her next tax return against her earnings. This idea of Megan is wrong against the law.

Murphy (2005) stated that according to government rules and taxation law, people should pay tax, make a tax return file for their yearly income. Different state has a different taxation law, rules and regulations. Like this Australia also has their governmental rules & regulations, tax law. Australian tax formula is different from others. In comparison with others, the total collection of tax rent roll was 29.8 per cent while others were 37.2 per cent. Total yearly tax income on profit is 56.6 percent while others 35.4 per cent. Therefore, the Australian taxation system is modified including value added tax, general tax with the income percentage of 2.7% while the others are 6.6%.thus the taxation system is developed in comparison with others near about June, July 2000 And According to Australian law, one should pay tax in respect of their earnings. Hence, in Australian taxation law, there are various tax amounts, rules for a various field like the business tax, painting, house tax, land tax and many others. The Australian law department is one of the very efficient departments to detect the tax law and its fault. The Australian law has many jurisdictions.  Australian law department consider goods and service tax as a value added tax. The percentage of value added tax is 10% on service tax. Wood & Watson (2001) stated that Howard government showed this taxation law on 1july, 2000. This new law changes the previous sales tax method. It design a new path to calculate tax of governmental tax, bank tax etc. In the tax summit of 1985 expenditure tax was introduced first. During the time of 1998 election program in Australia, many other fields are included under taxation system. Like tourism, reparation tax were also included and identified by tax department of Australia. A new tax system was introduced on 28 June 1999.It was named as “goods and services tax act”(1999). This act achieves its consent 8 July 1999.Finally the act is implied on 1 July 2000. Australian law department is processing the taxation methods in such a particular way that nobody have to pay extra pay even not a single penny. Evans, (2003) commented that generally tax is calculated on the large amount of yearly income. A big amount of the large income is generally collected as tax. Yet, Australian taxation office reduce some general tax like income tax, wholesale tax, bank tax, and some fuel tax etc. They very efficiently take the decision to reduce general taxes. They take this decision to increase their tax income and to solve the fear factor among people. Australian tax commission also evaluate the tax of real estate. The percentage of real estate tax is  high and increasing rapidly.

The Australian bureau of statistics also contributes a lot for the taxing enactment. The tax research department has observed that there are few faults in tax laws. Many people use different strategy to manage the tax and to decrease the tax amount. They very tactfully use the follies of tax rules and imply them on their tax amount. Many people in Australia like this practising the different strategy to escape tax. Australian federal government federation observed that these illegal practising of escape tax is increasing in high rates because people feel fear to give tax due to high tax amount of certain fields like civil tax and many others (Profits & Profits, 2004). 

Australian tax department has increased many taxes at such a rate that it is too possible to meet for a middle-class family. Many taxpayers, accountant take this chance as their golden opportunity to escape tax. Whiteford & Angenent (2002) commented that the economic recovery tax act of 1981 has decreased the percentage of tax from 70% to 60% to stop this kind of malpractice. The tax department has a deep knowledge about tax recovery. Therefore again tax percentage of supplying and housing tax is decreased by 30%. From 2005, Australia and many other companies are following International Accounting Standard. There is also some limitation so gradually Australian tax department again modify their taxation rule. The federal Government of Australia has taken some steps to prevent tax loss. Therefore, there is still some gap which accountants, taxpayers, suppliers, house renters, civil workers use as their benefits. A large number of common mass is paying less tax against their huge income.

Thus, it has affected the total income tax and decrease the state income. Tax department plays an important role in world economics. Thus, in Australian tax department is playing a key role in collection income. At present in Australia many accountants, taxpayers are running after new strategy, tax planning as Australian tax office observed. Internal revenue service observed that the misuse of the tax law is increasing day by day since 1990. Hofmann, Hoelzl, & Kirchler (2008) stated that if it is going to this Australia might be facing a massive financial problem in future. Therefore, internal revenue service and Australian taxation board look after this matter. They are trying to find a path to solve this problem. Hence, no one takes the chance to misuse the law.

Henry et al. (2009) stated that Australian taxation law made very strong and strict. Therefore, still, a gap is there. According to Australian law, people can use some strategy legally to solve their tax problem but there is some few strategy. Australian law allows people to use the particular followings. Many people of Australia gradually start to follow that strategy. It will also help to decrease the large number illegal practising of tax strategy.

It is said that if there is law then there is surely a gap. Just one has to know the proper utilisation of that gap. Increasing the awareness among people Australian taxation offices organised an awareness and knowledge program in 2008-2009. Then it was observed that a large number of workers, taxpayers and many organisations showed their strong interest in that program. Actually, they have a very poor knowledge about the processing method working formulas of tax and superannuation’s amount.

 In the case of Megan, she also earns a large amount from the various fields. Her money income sources are from various sides. Therefore, according to the Australian law, she should pay a certain amount of tax for her total yearly income. The segregation her tax amount will depend on her various sources, as she has to pay a certain amount based on company tax, and other tax amount, exhibition tax like this. Megan does not want to pay an amount which she should pay as a total tax amount according to Australian tax law (2016, Treasury.gov.au.). Megan works as a mining engineer so he has to pay a certain amount for his service. According to her service income, she has to pay near about 10% tax amount on her service tax.  Australian tax department consider some strategy to manage the tax amount. There are various ways for Megan to fulfil his desire. Megan can choose any strategy to escape or decrease the tax amount. He might donate certain amount in orphanage.

This way he can show that she spends her money and her total income is not so high. Naturally, her tax amount will decrease automatically. This particular process is not so popular, largely followed because in this way money is spent. There is no chance to refund the money. Megan cannot get profit, savings from this. Few people who have excess income do such practises. They just spent their extra money in this way. She can buy some property with her earnings. Therefore, a large amount of money will be blocked in property. Everybody knows that property is an asset, which has increasing value according to the market.

If Megan spend large amount of money in buying property her total income will be low. She does not have to pay a big amount of money as tax. Thus, she can save her earnings. Megan can get a double profit, earn handsomely from her property. Actually, the price of everything is increasing day by day Rate is getting high. Hence, property, estate is like a gold mine. Just dig the mine and earn more profit. At present moment if market value of one property is 10 lakhs. Then after 5-10 years this value will be double or more near about 50-60 lakh. Hence, one who buy this property with 10 lakhs and after 10 years get near about 60 lakhs approximate so his savings or earnings will be 50 lakhs at that time. One can live his life without any tension. If at present situation Megan, have a good property it will secure her future with double or more benefits as well as save her earnings by paying less tax. Megan can invest her money in real estate or any profitable business. The output will be same. Here she also gain more profit & earns good. As at present situation the market price, business value of real estate is very high.  Therefore, she can earn a lot. If the business in which she invests her money is running good after the investment amount of profit from the business will be so good. Megan can also buy a many gold jewelleries and gold bar, she can also in gold market in share. If the share of gold is high, then the profit amount which she will get from the share is just cannot be imagined. The money will be saved for her future expenses. In case by any chance she will face financial crisis she can draw the large cash amount from her gold jewellery. Therefore, if she invests & block her earnings in such a way then she can very escape the tax strategically and tactfully. If there is not a large accessible amount in her bank account or any deposits amount then tax amount will low (Productivity Commission, 2002). These ideas really help her a lot because according to Australian tax law one’s tax amount depends on his total earning deposits, yearly income. If anyone spent his money from his savings then the spending amount is not so easily accessible. Here Megan also uses these strategies. Following the strategy she can easily climbs up the bright future. Thus, she will be able to fulfil her coveted desire and live her lavishly.

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