14 Aug 2024
Australia is a country that deserves attention for work and education opportunities. Nigerian migrants work and earn a better living in Australia than in their home country. They send money online to Nigeria from Australia to offer financial support back home.
It is pretty fascinating for everyone to be going to Australia for work or education. You easily find multiple job opportunities in Australia, thanks to its robust economy. But remember that in Australia, you will have to be careful about the country’s tax regime. Australia is particular about its taxation rules and tax implications. Let’s understand the Australian taxation system together.
Australia, like every developed country, derives its revenue from the taxes it collects. When you are living in Australia you need to understand the tax system of the country. The taxation system in Australia is complicated and has several complicated terms.
You may find it challenging to navigate the tax landscape of Australia. But remember that understanding the tax system of Australia is essential as if you are not aware of it, you can land in financial trouble. The least of the financial complications you can face is double taxation.
The Australian taxation system is based on two main pillars. One is the income tax, and the other is the GST. As a Nigerian migrant working in Australia, you can pay income tax if applicable. You will likely get to pay income tax if you earn a good living and send money to Nigeria online from Australia. Because, in all likelihood, you are doing a job. Remember that this tax differs from what you may pay for your cross-border financial transactions.
Income tax is the principal tax obligation in Australia. It is levied on various forms of income and plays a significant role in strengthening the country’s economy. Income tax is applied to salaries, wages, and investment gains, including dividends and capital gains, business profits, government pensions, and rental income.
The income tax in Australia is progressive. It means that the tax rates increase as your income increases. It is directly proportional to your income in different sectors and the profit you get from the aforementioned areas.
GST in Australia is a consumption tax of up to 10% applied to most goods and services and an extended range of other items sold or consumed within the country. The GST in Australia is essentially a Value Added Tax (VAT). This means that the tax is applied to every stage of the production and distribution process, but it is ultimately paid by the end consumer. Some of the basic services, however, such as essential food items, healthcare, and education, are exempt from GST.
Every country has set a different mechanism for applying GST to services and goods. These mechanisms are established according to the specific needs and requirements. Australia is no exception. Below is the simplified breakdown of Australian GST.
· Businesses have to add 10% GST to the price of their taxable supplies
· Businesses can then claim credits for GST they paid on their purchases
· It leads the end customer to pay the GST on the final price of the goods and services
As a Nigerian migrant working in Australia, you also pay GST on the goods and services you use. For example, you pay GST on every money transfer from Australia to Nigeria. But you need not worry much about this tax as it is a small amount that is still compensated for, depending on what type of service you get and which service provider you choose.
As mentioned earlier, Australian taxation is pretty progressive. The government is particularly concerned about getting people to pay their due taxes. The revenue thus generated is spent for the welfare of the people. But it is not only about generating revenue. GST in Australia benefits both consumers and businesses alike. Have a look below.
The Australian financial landscape is highly suitable for businesses, which is one reason why more and more businesses are being established across the country. A walk around some of the Australian cities will prove this point. Even though taxation is progressive in the country, businesses continue to be established because GST offers the following benefits.
· Reduced compliance burden
· Streamlined administration due to input tax credits
· A level playing field for businesses as almost all goods and services are subjected to the same tax rates
· Increased competition in the Australian business landscape
As a Nigerian migrant working in Australia, you are a consumer as you purchase goods and avail services of different types. You, therefore, have to pay GST on whatever you buy. But this GST payment benefits you in the following few ways.
· More transparent pricing as GST is added to the advertised prices
· Overall lower tax burden
· Increased competition that leads to reduced prices
Given that Australia has much more to offer you in several ways, including its culture, the question is: how much do you know about Australian culture? If you wish to delve deeper into Australian culture, then click HERE.
Understanding a taxation system, be it Australian or otherwise, is challenging as taxation is complicated. But once you understand it, there are many benefits. As mentioned earlier, you can avoid paying double taxes and getting the following few benefits.
· Being informed about your tax obligation leads to enhanced financial management. It leads to significant tax savings and more income retention.
· It streamlines your interaction with the Australian Taxation Office (ATO) saves you from paying penalties, and helps you with accurate tax filing.
· Understanding the tax implications helps you make informed decisions. It also helps you with holistic strategic financial planning.
· A deep understanding of the Australian tax system as a Nigerian migrant will lead to less tax-related anxieties.
Imagine you are trying everything to earn as much as possible to send more financial aid to your family, and suddenly, you realize you are behind your tax schedule! Can you quantify the anxiety you will face on realizing this?
The advent of technology has made it easier for you to send money to Nigeria from Australia, but it still is a tricky terrain. You will find many service providers that offer you seemingly the best services.
However, you need to ensure that the service provider you choose complies with the Australian tax regime. This will ensure that your transactions are recorded and safe and follow the regulations of the ATO. You may have to pay a little extra for your transactions due to tax implications, but certain service providers will charge you a low fee and offer you live and market-competitive currency exchange rates that will compensate you for both fees and taxes.
The Australian tax regime is progressive and robust. The government is pretty concerned about collecting taxes and also is particular about it. In addition to this, there are two main types of taxes that almost everyone in Australia is subjected to. These two types of taxes in Australia are the income tax and the General Sales Tax (GST).
There is a big difference between income tax and the GST. Income tax is levied on your income sources, which can be your salary, wages, pensions, rental incomes, investment gains, and business profits. General Sales Tax (GST) on the other hand, is levied only on the goods and services of different types you avail of.
The Australian government collects taxes through the Australian Tax Office (ATO). These taxes add to the nation’s income, and the government then spends this revenue on the welfare of the people. This welfare includes offering basic life amenities such as healthcare, education, safety, food, shelter, and so on.
If you understand your tax obligations, you will gain several benefits. These include avoiding double taxation, enhanced financial management, streamlined interaction with the Australian Tax Office (ATO), and better strategic financial planning. This understanding will also reduce your tax-related anxiety.
Taxes directly impact international money transfers. The service provider has to pay taxes to the ATO, so they charge you a little extra for offering their services. But if you choose a service provider that charges a low fee and offers live exchange rates, it will likely compensate you for the fee and the taxes you have paid for your transactions.
Resource(s)
· Nigerians in Australia
