Suppose a Negative Income Tax System Is Established and the Formula

question 18

Multiple Choice

Suppose a negative income tax system is established and the formula to compute a person's annual tax liability is: tax due = (25% of income) - R150 000.
If a person earns no income then he would receive a negative income tax payment of

• A) R37 500.
• B) R150 000.
• C) R187 500.
• D) R600 000.

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