Media Release...


Study reveals Australia's low-income earners as 3rd lowest taxed in world group.

Embargoed until monday 5th November 2012

According to research by UHY, the international accounting and consultancy network, Australia has one of the lowest personal tax rates for low-income earners in the world compared to other major global economies.

The report looked at 25 countries across UHY's international network, including all members of the G8 and the emerging BRIC economies comparing the basic 'take home pay' of a single, unmarried employee after income taxes and employee social security deductions of USD 25, 000, USD 50,000, USD 200,000, USD 250,000 and USD 1,500,00.

When ranked by lowest personal tax rates, Australia ranks 3rd out of 25 countries for taxes on those earning USD 25,000 per year. (see pages figures1-4)

Australians earning USD 25,000 keep USD 23,873 of their income, while those earning USD 200,000 keep USD 132,097 of their income.This is USD 367 and USD 41,903 less than income kept in Japan and Russia - the lowest taxing economies for USD 25,000 and USD 200,000 respectively (excluding UAE).

James Tng,Tax Partner, UHY Haines Norton in Australia and member of UHY, suggests that Australia is finding a balance between a progressive and competitive tax system.

“Unlike other major industrial economies, Australia doesn’t have a huge debt burden toc omplicate things,” Mr Tng said.

“There has been a general easing of the tax rates of low and middle income earners over the past decade, beginning with the introduction of the GST in 2000.”

“Australia also wasn’t forced to raise personal taxes due to the fiscal strength of our economy prior to the global financial crisis where there was little debt and very little in the way of the social security hurdles compared to other European economies,” Mr Tng Said.

The BRIC countries – Brazil, Russia, India, China – all have some of the lowest levels of personal tax and social security contributions.The average tax payer in a BRIC country will keep 84% their income at USD 25,000 and 75% at USD 200,000. This compares to just 80% and 62% for the same average tax payers in G7 countries.

With tax rises in France, Italy, Germany, and Canada, the G7 could only manage an average tax cut of USD 11 for those earning  USD 25,000 from 2011 to 2012, compared to the average USD 259 tax cut in the BRIC emerging economies.

Australians earning USD 25,000 had a tax cut of USD 478 from 2011 to 2012, although those on USD 200,000 saw their taxes rise by USD 2,676.

To view study data Download PDF