A large proportion (53%) of the tax that “masquerades” as company tax is actually personal tax collected (or withheld) at the company level. This means that the effective company tax in Australia is much closer to 17% than the statutory rate of 36%.
The reason is the introduction of imputation tax in July1987 which substantially reduced the previous double tax on company earnings; company tax followed by personal tax on dividends.
So, as I mentioned in many previous post, it was a con job to extract more money from some shareholders by denying them a portion of their dividend. And for those who could utilities the imputation credit of denying the immediate use of the grossed up portion.
The double tax issue wasn’t a problem for individual shareholders but a strategy for the govt. as mentioned above, under the guise as being fairer and it’s simplification for immediate access to taxpayers funds
