If the tax system seems unfathomable sometimes, keep in mind that throughout human history there has been a plethora of “strange” rules and regulations in regards to tax that citizens of various jurisdictions, and time periods, have had to cope with. And the modern era is not immune from some head-scratching wacky tax facts (WTFs).

WTF #1
A controversial tax proposed in New Zealand in 2003, officially dubbed “agricultural emissions research levy”, came to be known as the fart tax by the farmers who would have borne the tax (being levied on livestock holdings to counter the cost of greenhouse gas emissions from their animals). Note however that reports have deemed the tax’s nickname a tad misleading, as most methane production is from the first stomach of bovine livestock, and therefore a byproduct of burping rather than from the other end.  In 2004, a consortium from NZ’s livestock industry agreed to pay for a portion of this research (just not via taxation), although the government reserved the right to reconsider the tax if the industry withdrew from the agreement.

WTF #2
Great Britain in the 1690s and France in the 1790s introduced a tax based on the number of windows in a house. Consequently, houses began to be built with very few windows, or people would close up existing windows. In England, after 155 years, medical authorities began to think that health problems in the citizenry was caused by a lack of fresh air. There the tax was finally repealed in 1851, with France waiting until 1926 to do the same.

WTF #3
During the 1st century CE, the Roman emperor Vaspasian imposed a urine tax (Latin: vectigal urinae) on the distribution of urine from public urinals connected to Rome’s cloaca maxima, which means “great sewer” (so this clears up another bit of trivia). The urine collected from public urinals was sold as an ingredient for several chemical processes, as well as in the tanning process. It also whitened togas, as it contained high levels of ammonia. When Vespasian’s son complained about the disgusting nature of the tax, his father held up a gold coin and asked whether he felt offended by its smell. The phase pecunia non olet (money has no odour) is still used today to indicate that the value of money is not tainted by its origins.

WTF #4
In 1861, strapped for cash with which to continue the civil war, then US President Abraham Lincoln signed a bill that imposed a 3% tax on incomes between $600 and $10,000 and a 5% tax on higher incomes. The law was amended in 1864 to levy a tax of 5% on incomes between $600 and $5,000, a 7.5% tax on incomes in the $5,000 to $10,000 range and a 10% tax on everything higher. The law was repealed in 1871 and declared to be unconstitutional, but Capitol Hill got over that inconvenience by 1909 and a personal income tax was again raised, this time to stay.

WTF #5
A tax on foods containing saturated fat was introduced in Denmark in October 2011 at a rate of €2.14 per kilogram of saturated fat. Believed to be a world first, the targets were butter, milk, cheese, pizza, meat, oil and processed food if they contained more than 2.3% saturated fat. Two Christmas dinners later, the “fat tax” was repealed in January 2013.

WTF #6
Around 1700, the Russian emperor Peter the Great placed a tax on beards. It is documented that he developed anti-beard sentiments after his 1697 grand tour of western Europe. The tour famously convinced the monarch that Russia was desperately behind-the-times — economically, scientifically, and sartorially — and inspired him to undertake substantial efforts towards modernising his country’s male population with the clean-shaven look.

WTF #7
After Federation in Australia, the colonies (now states) levied income tax, with the Commonwealth (Federal) Government getting a smaller slice of income tax from 1915. In 1942 the Federal Government introduced legislation that increased its income tax rates to raise more revenue. The legislation provided for reimbursement grants to the states and territories provided that they ceased to levy their own income taxes. The uniform taxation arrangements were initially only meant to apply for the duration of the Second World War and one year thereafter. At the end of the war, the states sought to regain their income taxing powers but were unsuccessful. More slices of the revenue pie came their way when GST was introduced.

WTF #8
Some readers may not even remember the 1 cent coin, but we’re sure many others will recall the “copper” 1s and 2s with either nostalgia or a feeling of “good riddance”. They were actually made of bronze, not copper, and filled Australians’ change pockets before they were withdrawn from circulation in 1992. Once collected, most of the coins were melted down and the metal re-used. All of the bronze medals awarded in the Sydney Olympics of 2000 were made of recycled 1 and 2 cent coins. Also, the 2000 Olympics administrative team included a group of ATO officers who advised visiting athletes of any tax obligations and helped them in reclaiming reimbursements for the newly introduced GST for their expenditure during the games.

WTF #9
When the Romans occupied Egypt, they found that some religious ceremonies called for the sacrifice of a calf in temples. After priests had assessed the purity of the animal slated for sacrifice, they placed a seal around its horns signalling its suitability. Records exist stating the required tax was paid by religious practitioners, with the payment of said tax occurring on the day of sacrifice.

WTF #10
The introduction of electronic lodgment of tax forms over the final decades of the last century not only reduced the time it took to send out returns from 10 weeks to two weeks but had a significant impact on the incidence of repetitive strain injury among data processors at the ATO. The introduction of GST in 2000 may also have had an impact on RSI incidents for ATO staff over the following decade.

WTF #11
The expenses of World War I were so great that the Commonwealth Government introduced three new taxes in 1917: an entertainment tax, a wartime profits tax and a bachelor tax. The latter was argued in Parliament in September 1917, and raised such a bitter protest (including from Catholic priests) that it was never put into operation.

WTF #12
Latin possesses a word that has come to be deemed the origin of our modern word tax, which was the verb taxare, which means to estimate or appraise. Hence taxo (“I estimate”). The original Latin verb became taxer in Old French, and crossed over into English as both task (retaining the meaning of estimate) and tax (both verb and noun). Speaking of Latin and the Roman empire (scroll down), Julius Caesar was the first to implement a sales tax. During his rule, sales tax was a flat 1%, but under Caesar Augustus, the sales tax was 4% for slaves and 1% for free citizens.

WTF #13
Primary industry suffered severely in the 1930s due to drought and the Depression, so the government introduced three new taxes to support farmers: the apple and pear tax, the flour tax, and the wool tax — in the 1930s, the Australian wool industry was considered to be going through a crisis.

WTF #14
A “scutage” tax was first introduced by King Henry I (English monarch 1100-1135), and was an opportunity for knights and nobles to opt out of their duties to fight in wars (the term is derived from Latin scutum, “shield“). Under Henry and his successor Stephen (reigned 1135-1154), this was deemed as reasonable as the tax was not excessive, so the nobles who did not want to fight didn’t have to as they could afford to pay the scutage tax. This changed under King John (1199-1216), as he deemed scutage tax as a “cowards tax” and slapped a 300% increase on it. This was not well received and forced knights and nobles to fight in wars they could ill afford. It was part of other actions of King John that is believed to have led to the creation of the Magna Carta in 1215 that limited the monarch’s power.

WTF #15
“Bottom of the harbour” tax schemes were a form of tax avoidance used in Australia in the 1970s. The harbour referred to was Sydney Harbour, which was near the financial district. The operation at the heart of bottom of the harbour schemes involved a company that would be stripped of assets and accumulated profits before its tax fell due, leaving it then unable to pay. Once assets were stripped, the company would be sent, metaphorically, to the “bottom of the harbour” by being transferred to someone of limited means and with little interest in its past activities. The company’s records were often lost too (quelle surprise). The ATO, being in the same position as other unsecured creditors in the case of an insolvent company, ended up with nothing. Participation in the schemes was made a criminal offence in 1980.

WTF #16
The tax office of Sweden (Swedish Tax Agency, or Skatteverket) administers the country’s baby name regulations, which were enacted in 2017, replacing a 1982 law. These regulations require people to have their child’s name approved by the agency before the child turns five. Parents failing to do so have been known to have a penalty issued of up to 5,000 kroner (A$778). Some interesting names have been allowed to pass by the Swedish Tax Agency, such as Metallica and even Lego, but the names Ikea, Allah and Jesus have been disallowed (although the latter has been permitted on appeal for use by members of the country’s Hispanic community).

WTF #17
British PM in 1783 William Pitt the Younger levied income tax as a “temporary measure” to raise funds for the Napoleonic War, but he also imposed taxes on wigs and wig powder, which were social status symbols of wealthy men. His attempts at extorting the wig wearing rich backfired in the end when the majority of men took to either powdering their real hair, if they had sufficient, or opted for wearing a hat. The wig and wig powder tax was repealed 1869 as these had almost completely gone out of fashion and hats had once again become part of general attire.

WTF #18
The UK’s value added tax (VAT) pre-dates the introduction of the iconic Australian biscuits Tim Tams into Britain, which some blame/praise Boris Johnson for bringing into the country. But until this development, visiting Australians have long wondered why their favourite indulgence had to be packed with other “personal effects”. The answer is most likely due to a quirk in the UK’s tax laws. Targeting of the UK consumption tax at these snacks in general has always taken an exception the coatings applied to one’s morning cuppa accompaniment. No duty is payable on plain biscuits (zero rated), but cover it in chocolate and an extra percentage is piled on (standard rated). See this UK Government VAT guide, para 3.4.2. Note that VAT rates have been discounted temporarily due to COVID-19.

WTF #19
Social security measures are not a modern day phenomenon, as even in ancient Rome there existed what was known as the Cura Annonae, or the “grain dole”. This was a government program which gave out free or subsidised grain, and later bread, to the poorest residents of the city of Rome. The city imported most of the grain consumed by its population, estimated to number one million people by the second century CE. The grain dole was said to be part of the Roman leadership’s strategy of maintaining calm among its citizens by providing them with what the poet Juvenal sarcastically called “bread and circuses“. In 22 CE, the emperor Tiberius said that the Cura Annonae, if neglected, would be “the utter ruin of the state”.

WTF #20
King James 1 of England and Scotland (1603-1625) passed a law requiring the ace of spades in every pack of cards to carry its printing house’s insignia, to prove tax had been paid on its manufacture. Forging an ace of spades was a capital crime, and the card is still known as the “death card”. The system was changed again in 1862 when official “duty wrappers” were introduced at point of sale. After this, although card makers were free to use whatever ace of spades design they wanted, most chose to keep the ornate design that is still used. Stamp duty on playing cards was only abolished in 1960.

WTF #21
To quote from a scene of the Australian movie The Castle, there is an item of Australian tax law that really does depend on “the vibe”. In this particular ruling, the words used however are “ambience” and “atmosphere”. Taxation ruling TR 2007/9 describes the circumstances when an item used to create a particular atmosphere or ambience in a consumer-facing environment, for example in a cafe, restaurant, licensed club or hotel, constitutes an item of plant for the purposes of determining whether a deduction is available under either Division 40 (for depreciating assets) or Division 43 (for capital works). Think, for example, of a restaurant that has decorated its dining area as a medieval banquet hall. As part of the medieval theme, replicas of stone walls are constructed out of painted polystyrene and are fastened to the walls, as are themed lights that look like flaming torches. The polystyrene walls and the themed lights do not form part of the structure of the building, but retain a separate visual identity with the sole purpose of creating an atmosphere or ambience to entice customers and add to their dining experience. Being so related to the restaurant’s business, the Commissioner holds that the items come within the ordinary meaning of “plant” and are therefore deductible as such.

WTF #22
A few years ago, Conegliano, a town in Italy’s Veneto region famous for its dry prosecco, began to apply a little-known 1993 nationwide law to levy a tax of €100 ($158) a year on shopkeepers whose signage and awnings created shadows on public spaces. The local shopkeepers, many of whom did not even know they were being hit with the tax, fought back of course.

WTF #23
In the late 17th century, William of Orange’s court popularised gin – then the favoured drink of the Dutch – among the British. English troops, fighting alongside soldiers from the Low Countries during the Thirty Years’ War, had already noted the bravery-inducing effects of the drink on their foreign counterparts – nicknaming it “Dutch Courage”. Thanks to lower import duties on gin, and deliberate hikes to beer duty, gin quickly supplanted ale as the favoured drink of the poor. Sales skyrocketed, with one estimate putting gin consumption during the 1740s at an average of two pints a week for every man, woman and child! London’s birth rate fell, while the mortality rate rose, as people literally drank themselves to death as can be seen in contemporary artworks like William Hogarth’s Gin Lane etching. The government understandably sought to combat the social problems, and passed a far-reaching Gin Act in 1736, which aimed to make (legal) gin prohibitively expensive for all but the wealthiest. The act required all sellers to purchase a retail licence for £50, which was a huge sum at the time. The act certainly changed the gin trade, but not in the way intended, as the quantity of “bad spirits” consumed by the English public continued to rise, with gin sellers deploying increasingly creative means to dodge the legislation. This era is even thought to have originated the world’s first vending “machine”, as a front for selling bootleg gin on the streets. A replica of the vending contraption has been made by an enterprising publican.

WTF #24
Willie Nelson made a special album to pay his tax debts, after federal agents in 1990 seized Nelson’s properties in six states and assets which included boxes of master tapes, touring equipment, gold and platinum records and clothes. Called the IRS Tapes: Who’ll buy my Memories, the album, featuring only Nelson and his guitar, was released by Sony in 1992 to pay Nelson’s tax debt with the IRS. The album generated $US3.6 million for the IRS, who requested a further $US9 million from Nelson to satisfy all his accumulated tax debts. The album was well received by critics.

WTF #25
Many readers may have heard that the infamous US crime figure Al Capone (aka Scarface) wasn’t sent to prison for murder, but was instead charged with tax evasion — however details of these charges are usually sparse. The FBI website details that tax evasion and income tax fraud charges were built for Capone, his brother Ralph “Bottles” Capone, Jake “Greasy Thumb” Guzik, Frank Nitti, and other mobsters. Capone agreed to a plea deal that included a recommended prison sentence of two-and-a-half years, however the judge in the case refused to accept the deal, which led to Capone withdrawing his guilty plea and so the case went to trial. In October 1931, the jury found the gangster guilty of five charges (three felonies and two misdemeanors) out of the more than 20 counts against him. He was sentenced to 11 years behind bars and fined $US50,000 (the harshest sentence delivered for tax fraud up to that point) as well as being charged $US7,692 for court costs, in addition to $US215,000 plus interest due on back taxes.

WTF #26
“A brief history of Australia’s tax system” (an extract from the Treasury website): “In 1942 the federal government introduced legislation that increased the federal government income tax rates to raise more revenue. The legislation provided for reimbursement grants to the states provided that they ceased to levy their own income taxes. Although a state could legally continue to impose its income tax, doing so would impose an increased burden on its residents and also disqualify that state from receiving federal government grants. In practice, this prevented the states from continuing to levy their own income taxes. The uniform taxation arrangements were initially only meant to apply for the duration of the war and one year thereafter. At the end of the War, the states sought to regain their income taxing powers but were unsuccessful.” Comment: Interestingly, the states have apparently never sought again to regain or exercise their income taxing powers – for good political reasons no doubt! 

WTF #27
The just ended Olympic competition in Japan brings with it some memories of a tax controversy from another recent Olympics. In 2012 there was an issue for some competitors after the London Summer Olympic Games about the tax treatment of foreign athletes. According to the British tax code, foreign athletes competing in the UK have all their endorsement income taxed, even income originating from other countries, and the income is taxed proportionally to the time spent in the UK. The law was waived by the British government for the duration of the 2012 Olympics (see the HM Revenue and Customs’s EM on this here), but it kicked back in after the conclusion of the games.

WTF #28
A halloween tax? In the US state of Iowa, pumpkins along with other vegetables are exempt from sales tax if they are used as food. However tax is levied if the consumer’s intent is to use it for other purposes, such as to carve the pumpkin for use as a jack-o’-lantern for a halloween display.

WTF #29
Non-violent civil disobedience was a hallmark of the renowned Indian independence campaigner Mahatma Ghandi. Recognised as one of Ghandi’s first acts of protest was a 24-day march held in early 1930, ostensibly held to protest against the British Government’s tax on salt. The march started with several dozen followers but ended up with tens of thousands joining along the way. The long walk came to be known as the “salt satyagraha”, and came to be seen as the inaugural act of civil action in the long years of protest until Indian independence was won by 1947. The salt tax walk was celebrated with a re-enactment in 2005, and a memorial dedicated to it in 2019.

WTF #30
First proposed in 1990, it was suggested that the complex Australian tax system could be simplified by re-drafting into plain English. The then Treasurer Paul Keating appointed a joint Treasury and ATO task force to investigate the idea. The re-draft project, accorded the grand title of the “Tax Law Improvement Project”, saw a progressive implementation of the re-written law, despite widespread resistance by the tax profession which called for completion of the rewrite and implementation as a “big bang” project. The idea was that the plain English version of the law would gradually replace the existing tax act, the Income Tax Assessment Act 1936 (first enacted in 1936 and amended continually since then) as provisions were added to the new act and repealed in the old one. An initial tranche of the new law was enacted in 1997 (as the Income Tax Assessment Act 1997) and a second tranche was added to the 1997 law in 1998. Of course, we now have concurrent acts plus various add-ons, and arguably a more complex tax system than ever.

WTF #31
The famous Rosetta stone was first unearthed by Napoleon’s officers in northern Egypt in 1799, and seized shortly after by the British when they defeated the Napoleon in 1801. A year later the Rosetta stone was moved to the British Museum in London, where it has been on display ever since. The stone was a central aid in deciphering Egyptian hieroglyphs as it was written in Greek, a lost Egyptian script called demotic, and hieroglyphics. What is less well-known is that the topics covered by the writing on the stone was mostly about tax.

WTF #32
News comes this week that the People’s Republic of China is considering expanding it’s test pilot program of imposing a property tax — not only expanding the jurisdictions so far covered but the scope of proposed property taxes as well. A tax on property is a definitive step away from the collectivist mantra more expected of communist China, and is more likely to be a feature of capitalist systems, although the proposed property tax would also be targeted at reducing wealth inequality.

WTF #33
Taxation in Australia pre-dates the nation itself, with income taxes before federation — Tasmania in 1880, South Australia 1884, New South Wales and Victoria in 1895. Several other taxes remained in place after federation in 1900, when the colonies that transformed into states were granted the constitutional power to share the tax base with the newly formed Commonwealth government. These arrangements were of course overhauled relatively quickly, especially under the severe cost demands of the Great War.

These WTFs first appeared on the Tax & Super Australia newsroom website