ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Recent Individual Income Tax Reform

An attempt is made here to evaluate recent reform of the non-corporate tax structure by examining its current base, the rate structure, selected administration reforms and likely implications of these reforms for compliance costs and compliance. There are four main conclusions. Tax base reforms have increased the differential treatment of income from different sources. Nevertheless reforms stop short of steps needed to fully capture offsetting benefits from reduced compliance costs and increased tax compliance. Second, the restructured tax rates are the most liberal since the 1960s, except marginally for individual taxpayers close to the exemption limit. Third, however, reforms are likely to increase individual compliance costs as a percentage to taxes collected. Fourth, compliance and so the revenue impact of recent reforms is likely to have been positive though moderate.

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