The GST (Goods and Services Tax) proposed by the Howard government is a new tax which plans to add ten percent to the cost of every item purchased whether it be a car or a pen with only a few exceptions. The tax set to commence on July 1 2000 may still not become a reality if the senate does not have a majority vote on the issue. The VAT (Value Added Tax) of the United Kingdom is much the same tax adding seventeen and a half percent to all goods and services (although there are exceptions). This tax is currently in operation in the UK. Differences between the proposed GST and VAT are not great but there are some significant differences.
If and when the GST becomes a reality a range of taxes including wholesale sales tax and provisional tax will disappear when the GST appears. Daily consumables and services will rise as a result of the GST. The government is promising to balance the tax by creating household savings through lower marginal tax rates. The question is, will this be sufficient compensation? It probably will not be. The ^Aussie battler^ will not be favoured with the GST, as the current compensation being offered is simply not sufficient. This tax proposal is yet to be passed by the Senate which means that the GST may not even become a reality. There may have to be some changes to the GST for it to be passed by the Senate without another federal election. Some of these may be food to be exempt from the GST, more compensation for lower income families, pensioners, etc. Although the government will receive ten percent of every item sold, not many items will actually rise by the full ten p ...