Constitutional basis of taxation - Wikipedia.Section 51(ii) of...

Constitutional basis of taxation - Wikipedia.




Section 51(ii) of the Australian Constitution[edit source | editbeta]
Australia is a federation and legislative power is distributed between the Commonwealth and the States. Section 51 enumerates areas of Commonwealth power. These powers are concurrent, and states can legislate on them, or on any topic not specifically prohibited them by the Constitution (e.g. section 53 specifically enumerates areas, such as the federal public service, where states may not legislate), but Section 109 holds Commonwealth laws prevail in circumstances of inconsistency.
Section 51(ii) allows the Commonwealth to enact laws implementing:
Taxation, but so not as to discriminate between States or parts of states.
The non-discrimination limitation repeats the more general prohibition found in Section 99 that the Commonwealth cannot discriminate between states in laws on trade, commerce, or revenue.
The broad power in s51(ii) to impose 'taxation' must be read subject to the start of s51 which grants the powers 'subject to this constitution'. S51(ii) must be considered in combination with s90.
Section 90 of the Australian Constitution[edit source | editbeta]
Section 90 gives the Commonwealth the exclusive, as opposed to concurrent with the States, power to impose 'duties of customs and of excise'. Any state taxing law on this power will be unconstitutional. The definition of 'customs and excise' has therefore been an important, and litigated, constitutional issue. Generally, a customs duty is a tax imposed on goods entering a jurisdiction. An excise is a type of sales tax on goods, and the High Court of Australia has interpreted this power broadly.
The major purpose of section 90 was that important objectives of federation were achieved: uniform trade relations with other countries; and free trade between the states. However, section 90 limits the states' ability to raise money, when they have considerable funding obligations (e.g. schools and hospitals). Therefore, section 90 and section 96 — which allows the Commonwealth to impose "terms and conditions" on grants — have led to a vertical fiscal imbalance.[citation needed]

Could you now explain to the viewers in layman terms which part supports you theory!
If I have missed anything please enlighten me. TIA.