AUSTRALIA is the only country that does not pay for its foreign exchange earnings through direct taxation, the Australian Bureau of Statistics said on Wednesday, as a new report highlighted how much countries are spending on imports from the rest in the years ahead.
In 2016, Australia collected $2.2 trillion from the International Monetary Fund and other global institutions in indirect taxes, including duties, tariffs and other import taxes.
Australia collects a large amount of revenue from foreign direct investment, including from overseas Chinese firms that are also investing in Australia.
But this year, there was a decline in indirect tax collections in the last three months of 2016 as investors were holding back investments in Australia, according to data released by the ABS.
The agency said in its latest World Investment Outlook, published Wednesday, that the drop in indirect income from overseas investment is mainly due to a rise in the dollar and lower oil prices.
The decline in taxes collected from imports is driven by the impact of the Reserve Bank’s decision in November to raise interest rates to a range of 0.5 to 1 per cent, and by lower commodity prices.
But Australia also collects a high proportion of its revenue from indirect taxes in the form of customs duties and import taxes, and foreign aid.
As well as the tax collection from the import of goods, Australia also spends a large share of its tax revenues on social programs, such as health care and pensions, and on overseas aid.