Excessive provisional income tax


  • Discriminatory tax requirements for self-employed persons

Nature

A self-employed person in most countries must pay provisional income tax in advance of earning the income, calculated on the basis of anticipated income. The system can discriminate against those starting out on a career as, say, a consultant, where the real income is likely to be much lower in the first few years than a reasonable wage. Yet the person is bound to pay inflated tax instalments, which further deplete capital resources and which may not be refunded for months or years.


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