Taxation Reduce the Capital Gain Tax

Question: Critically discuss very briefly whether the CGT discount has an impact on the effective rate of tax? Answer: It has been suggested By the Taxation authority of Australia to reduce the Capital Gain Tax (CGT) discount rate from 50% to 40%[1]. It is a fact that the current CGT discount rate results in the greater amount of tax payable. The Introduction of reduced discount rate would help in taxing the long-term gains in the single year. On the other hand, the new discount rate would help to determine the real value of the assets at the time of taxation. In addition, the discounted CGT rate would assist in measuring the effect of inflation while calculating tax. All these above-discussed issues would affect the tax rate of the country in various fields[2]. Hence, it can be said that the CGT discount has an impact on the effective tax rate. References Capital Gains Tax(2017) Ato.gov.au https://www.ato.gov.au/General/Capital-gains-tax/ Https://Www.Business.Unsw.Edu.Au/About-Site/Schools-Site/Taxation-Business-Law-Site/Journal%20Of%20The%20Australasian%20Tax%20Teachers%20Associati/3_Kenny_JATTA_Vol1_No2.Pdf(2017)business.unsw.edu.auttps://www.business.unsw.edu.au/About-Site/Schools-Site/Taxation-Business-Law- Site/Journal%20of%20The%20Australasian%20Tax%20Teachers%20Associati/3_Kenny_JATTA_vol1_no2.pdf Capital Gains Tax(2017) Ato.gov.au https://www.ato.gov.au/General/Capital-gains-tax/ Https://Www.Business.Unsw.Edu.Au/About-Site/Schools-Site/Taxation-Business-Law-Site/Journal%20Of%20The%20Australasian%20Tax%20Teachers%20Associati/3_Kenny_JATTA_Vol1_No2.Pdf(2017)business.unsw.edu.auhttps://www.business.unsw.edu.au/About-Site/Schools-Site/Taxation-Business-Law- Site/Journal%20of%20The%20Australasian%20Tax%20Teachers%20Associati/3_Kenny_JATTA_vol1_no2.pdf