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Related topics: | Key Data
| Budget & Plan|
Budget 2000
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APPENDIX
I
REDUCTION
OF INDIVIDUAL AND
CO-OPERATIVE INCOME TAX RATES
Present
Position
Currently, resident individual and co-operative income tax rates are
progressive ranging from 0% to 30% while non-resident individual income tax
is at a flat rate of 30%.
Proposal
As
a measure to increase the disposable income in order to stimulate
consumption, it is proposed that individual income tax rates be reduced by
one percentage point for all chargeable income brackets as follows:
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Chargeable
Income
Brackets
(RM)
|
Existing
Rates
(%)
|
Proposed
Rates
(%)
|
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1
- 2,500
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0
|
0
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2,501
- 5,000
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2
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1
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5,001
- 10,000
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4
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3
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10,001
- 20,000
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6
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5
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20,001
- 35,000
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10
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9
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35,001
- 50,000
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16
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15
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50,001
- 70,000
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21
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20
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70,001
- 100,000
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26
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25
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100,001
- 150,000
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29
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28
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Above
150,000
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30
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29
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The
amount of tax savings by an individual as a result of the proposed rates
reduction is shown in Table I.
Table I : Tax Savings By An Individual As A Result Of Proposed
Rates Reduction
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Chargeable
Income Brackets
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Current
Tax Rates
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Tax
Payable (RM)
|
Proposed
Tax Rates
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Tax
Payable
(RM)
|
Tax
Savings (RM)
|
Percentage
Of Tax Savings
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On
the first
On
the next
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2,500
2,500
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0%
2%
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0
50*
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0%
1%
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0
25*
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0
25
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50%
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On
the first
On
the next
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5,000
5,000
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4%
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50*
200*
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3%
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25*
150*
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25
50
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30%
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On
the first
On
the next
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10,000
10,000
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6%
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250*
600
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5%
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175*
500
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75
100
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21%
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On
the first
On
the next
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20,000
15,000
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10%
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850
1,500
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9%
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675
1,350
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175
150
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14%
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On
the first
On
the next
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35,000
15,000
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16%
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2,350
2,400
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15%
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2,025
2,250
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325
150
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10%
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On
the first
On
the next
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50,000
20,000
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21%
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4,750
4,200
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20%
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4,275
4,000
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475
200
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8%
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On
the first
On
the next
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70,000
30,000
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26%
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8,950
7,800
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25%
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8,275
7,50
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675
300
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6%
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On
the first
On
the next
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100,000
50,000
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29%
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16,750
14,500
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28%
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15,775
14,000
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975
500
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5%
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On
the first
Above
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150,000
150,000
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30
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31,250
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29
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29,775
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1,475
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*
Tax payers in the chargeable income bracket of RM10,000 and below enjoy a
rebate of RM110 in the case of an individual and RM170 (RM110+RM60) in the
case of a married person whose wife does not opt for a separate assessment.
After taking the rebate into account, tax payers under these income brackets
will not be paying any income tax.
In
line with the reduction in individual income tax rates, it is also proposed
that the individual income tax rate for non-residents be reduced from 30% to
29% and co-operative income tax rates be reduced by one percentage point for
all chargeable income brackets.
A
comparison between the current and proposed co-operative income tax rates is
as follows:
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Chargeable
Income
Brackets (RM)
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Existing
Rates (%)
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Proposed
Rates (%)
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1
- 10,000
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0
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0
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10,001
- 20,000
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2
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1
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20,001
- 30,000
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5
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4
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30,001
- 40,000
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8
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7
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40,001
- 50,000
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11
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10
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50,001
- 75,000
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14
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13
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75,001
- 100,000
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18
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17
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100,001
- 150,000
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22
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21
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150,001
- 250,000
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25
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24
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250,001
- 500,000
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28
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27
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Above
500,000
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30
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29
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The amount of income tax savings by a co-operative society as a result of
the proposed rates reduction is as shown in Table II.
Table
II : A Comparison Of Income Tax Savings By A Co-operative As A Result Of
Proposed Rates Reduction
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Chargeable
Income Brackets
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Current
Tax Rates
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Tax
Payable (RM)
|
Proposed
Tax Rates
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Tax
Payable
(RM)
|
Tax
Savings (RM)
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Percentage
Of Tax Savings
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On
the first
On
the next
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10,000
10,000
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0%
2%
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0
200
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0%
1%
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0
100
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0
100
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50
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On
the first
On
the next
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20,000
10,000
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5%
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200
500
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4%
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100
400
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100
100
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29%
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On
the first
On
the next
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30,000
10,000
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8%
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700
800
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7%
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500
70
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200
100
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20%
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On
the first
On
the next
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40,000
10,000
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11%
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1,500
1,100
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10%
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1,200
1,000
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300
100
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15%
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On
the first
On
the next
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50,000
25,000
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14%
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2,600
3,500
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13%
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2,200
3,250
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400
250
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11%
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On
the first
On
the next
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75,000
25,000
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18%
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6,100
4,500
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17%
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5,450
4,250
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650
250
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8%
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On
the first
On
the next
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100,000
50,000
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22%
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10,600
11,000
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21%
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9,700
10,500
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900
500
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6%
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On
the first
On
the next
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150,000
100,000
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25%
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21,600
25,000
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24%
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20,200
24,000
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1,400
1,000
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5%
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On
the first
On
the next
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250,000
250,000
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28%
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46,600
70,000
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27%
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44,200
67,500
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2,400
2,500
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4%
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On
the first
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500,000
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116,600
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111,700
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4,900
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4%
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Above
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500,00
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30%
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29
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These
proposals are effective from year of assessment 2000 (current year basis)
and will be implemented by amending the Income Tax Act 1967.
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