Reply to post: Re: Tax "Deeming Rate"

Australia cracks tech giants' tax dodge code

Alan Brown Silver badge

Re: Tax "Deeming Rate"

"a "Deeming Rate" on money sent overseas."

This works for straight royalty payments.

It's a lot harder to work out when what's being paid for is overinflated hardware prices.

Of course all taxes are eventually paid by the consumer and if the govt isn't making enough money there's a strong argument for raising GST/VAT.

Mind you, GST/VAT regiemes are generally bolloxed anyway. The only efficient way to operate is to run a flat rate on _everything_ and collect at every step along the chain (this means that if someone skips out you only lose the tax on their markup)

New Zealand adopted this model a long time ago and it simplfied the collection/customs structure so much they were able to lay off over 1/3 of the tax department. Subsequent changes have made it more complex and resulted in more people needing to be hired.

What counts for governments is not the tax rate but the _net_ tax collected - ie what's left after paying the administrative costs of the tax department. Simplifying taxation structures should be high on the agenda of any govt as it generally reduces gross taxation whilst increasing _net_.

At some point it may be possible to simply have a flat income tax rate or none at all, however this requires watching private imports carefully to ensure GST/VAT is paid on them.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon