Question

In: Economics

Analyze the issue of income tax shift issue in Australia

Analyze the issue of income tax shift issue in Australia

N/B: this is about how companies shift their profits from high tax jurisdictions to lower tax jurisdictions or countries

Solutions

Expert Solution

A tax swap is an adjustment in taxation that eradicates or reduces several or one of the taxes and establishes or alleviates others while keeping the whole tax policy constant. The companies running various functions shift their profits from high tax jurisdictions to lower tax jurisdictions, enhancing the economic policies (Gang et al., 530). Australia's tax shift is directly linked to price movement; changes are achieved via alleviating selling rates of products and lowering the buying price of bought goods.

Government is responsible for formulating a vital and compulsory plan price system; the firms, therefore, have no opportunities to decide the prices of the products in Australia. Additionally, tax burdens cannot be passed through price changes. The transfer of tax burden is still evidenced despite the centralized program management systems. The business and production operators have opportunities to champion their interests in business progress (McKerchar &  Margaret, 529). The free pricing system incorporates diverse avenues to meet tax demands hence legalizing the tax shift burden.

 

 

 

 

 

 


A tax swap is an adjustment in taxation that eradicates or reduces several or one of the taxes and establishes or alleviates others while keeping the whole tax policy constant. 

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