There should be one tax rate between 10% to 20%, rather than progressive taxation rates of earnings rise. This is to simplify the system with a flat-tax structure devised in which one single rate covers income tax, national insurance, corporation tax, value-added taxes and inheritance tax
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In 1994, Estonia replaced three tax rates on personal income, and another on corporate profits, with a uniform rate of 26%. Latvia & Lithuania followed, as did from 2001 Russia, with a rate of 13% on personal income and Slovakia. In the following years several other countries including Romania, Macedonia, Montenegro & Albania, all introduced a flat tax system. The most studied of these examples is Russia, where evidence from the IMF suggests that its 2001 reform did increase compliance.