Secondly, that the Second Schedule of the Inland
Revenue Ordinance be revised to provide both a lower initial tax rate and a more gradual progression through the various marginal rates as income increases (43). Furthermore, the point at which the maximum 25% marginal rate will begin to apply will be raised by $10,000;
Thirdly, I propose that the additional
personal allowance be increased
be increased from $5,000 to $7,000 for a single person, and from $10,000 to $14,000 for a married couple. Thus, the basic allowance plus the increased additional allowance will total $36,000 for a single person, and $74,000 for a married couple; below these income levels there will be no liability
(43)
If the revision proposed is brought into law, the table in the Second Schedule of the Ordinance would be amended to:
For the year of assessment 1988-89 and each year thereafter:
Upon the first $10,000
Upon the next $10,000
do
do
do
do
T
-
do
Upon the remainder
PROPOSED
PRESENT
38
5%
68
10%
9%
15%
128
15%
15%
20%
18%
20%
21%
25%
25%
25%
Examples of the effect on tax payable due to the revision of the marginal tax rates are given in Appendix F(3).
/to