Outline

This section examines the current Australian system of taxing goods and services.

Key points

• Historically, taxes on goods and services raised revenue relatively simply from narrow bases that are easy to tax, with a shift over time toward more efficient broad‑based taxation.
• Some taxes on specific goods and services may reflect a range of non‑tax policy objectives, such as reinforcing social policy objectives, or providing assistance to domestic industry.
• Specific taxes can also be levied to help correct market failures. For example, an effectively targeted tax creates incentives in the market for individuals to respond to environmental concerns.
• Improving technology is making it administratively feasible to replace some taxes with more direct user charges.