The taxable income of Ahmed, Badriya and Sameer is $20,000, $45,000, $100,000 respectively. Use the following tax rates: 5% for income from 0 - $20,000 10% for income from $20,001 - $50,000 15% for income above $50,000 Calculate the tax payable by each person. Explain the type of taxation system applicable in this situation. Is this system of taxation fair?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Question2: Income tax

The taxable income of Ahmed, Badriya and Sameer is $20,000, $45,000, $100,000 respectively. Use the following tax rates:

5% for income from 0 - $20,000

10% for income from $20,001 - $50,000

15% for income above $50,000

  1. Calculate the tax payable by each person.
  2. Explain the type of taxation system applicable in this situation.
  3. Is this system of taxation fair?
  4. Explain why this system is being criticised?
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