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Bank Account Debits Tax

Discussion in 'Investing Glossary' started by Glossary, 26th Sep, 2006.

  1. Glossary

    Glossary Active Member

    Joined:
    12th Sep, 2006
    Posts:
    25
    Definition:

    Debits Tax, was a state tax payable by all persons and organisations that make debits (withdrawals) to cheque accounts or accounts on which a cheque may be drawn.

    The trick with this tax was that it applied to all withdrawals from a cheque account, not just cheque withdrawals. For this reason, many people often set up a separate cheque account to their transaction account (which has no cheque facility), and transfer money to the cheque account only when a cheque needs to be written.

    As part of the introduction of GST, all states and territories have now abolished Debits Tax.

    Financial institutions and account holders were jointly liable for debits tax, however, it was usually paid by the financial institution and recouped from the account holder.

    State by State

    Also known as:
    • Debits Tax
    • BAD Tax
    • Debits Duty

    See also:
     
    Last edited by a moderator: 26th Sep, 2006