The next year’s income tax model will be a progressive one, meaning people with higher incomes will pay higher tax rates, IRNA reported.
The income tax will consist of four tax brackets next year: 10%, 15%, 25% and 35%.
Wages ranging from the base amount ($5,872) to three times more will be subject to a 10% tax rate on their additional income, three to four times more than the base amount will be taxed 15%, four to six times more 25% and the income of individuals who earn six times more than the base amount will be taxed at a 35% rate, according to Financial Tribune.
This method of taxation known as marginal taxation aims to tax individuals based on their earnings, with low-income earners being taxed at a lower rate than higher income earners.
The marginal tax bracket in which an individual falls does not determine how the entire income is taxed. Instead, income taxes are assessed on a progressive level.