Topical Tax Issue Essay Example | Topics and Well Written Essays - 1500 words

Topical Tax Issue - Essay ExampleThe guidelines ar intended to replace the previous privation proofing guidelines issued by the department of social and family affairs and in this article are referred to as poverty concussion estimate guidelines. The poverty impact assessment process aims at identifying the impact of policy proposal on those experiencing poverty or at risk of falling to poverty so that this can be given proper consideration in designing or reviewing the policy.The process does not intend to fundamentally transform policies to orient visibly the disadvantaged but are aimed to identify anticipated negative impact and put measures to counterbalance such impacts. Moreover, positive impacts are also determine so that they can be improved.As included in Budget 2007, these social rise up-being measures will benefit valuatepayers at the lower wall bracket of income distribution. This is because the absence seizure of such measures may lead to these taxpayers experi encing a significant deterioration in their income in relative terms. Analyzing these measures on the view of combined effect of social welfare changes and tax changes, they highlight that the most significant net income gain are to those on the lowest incomes. It indicates that much smaller gains will be to those in the lay to high income brackets. Proper analysis of these tax measures reflect that Budget 2007 is progressive in nature as it sees those dependent on the welfare are to descend the greatest gains. Budget 207 ensure s that the lowest income groups gain more progressively that is from welfare payments as compared to higher income groups who are main progressive contributors to the make up of public service provision. The resources targeted by Budget 2007 are over 55% in the individual(prenominal) income tax package to those on low incomes as advantageously as the elderly, widowed taxpayers and those with disability or under care of a person with disability. Taxpayer s at the lower end of income distribution will as well benefit from taxation measures if they are to become exempt. This is due to the fact that the entry point to taxation has been increase in Budget 2007. The basic personal tax credit and the employee tax credit was increased by Budget 2006. This was meant to ensure that the minimum remuneration in its annualized form was placed outside the tax net. At the end of 2006, the position still remained as a key governments aim on tax policy and continues to be met. The entry level to taxation was increased in budget 2007 through substantial increases in personal tax credit and the employee credit.For instance, entry point for a single employee below 65 years, the personal tax credit and the employee credit was increased by almost 13% in Budget 2007. This is a sufficient increase as it ensures that the minimum wage per hour is increased and therefore its annualized form will not be liable to income taxation. Moreover, employees health l evy was increased to ensure that taxpayers in low income bracket were not liable for the levy. The income tax changes announced in Budget 2007 to the extent that they apply are intended to have a significant beneficial impact for those on low incomes. This is because those in low incomes will receive additional payment for each child below six years of age in comparison with previous years. In conclusion, Budget 2007 income tax measures are intended to improve