Evaluating the Effects of Repeated Amendments to Income Tax Laws on the Levels of Social Welfare of the Palestinian Taxpayer

Abstract

The change in income tax laws recorded a low impact on the level of the welfare of the Palestinian ordinary taxpayer, amounting to 15.29% of the desired level, three-quarters of which is due to the change from Law No. 25 of 1964 amended to Law No. 17 of 2004., and the rest was ascribed to  other amendments in the upcoming legislations. The results of testing the study hypotheses confirmed that there is no statistically significant relationship between the amendments to the income tax laws on income, deductions, and exemptions to the level of welfare of the natural taxpayer, and the correlation between any of them and the taxpayer's welfare level is also weak. The relationship between the length of the adjustment period and the taxpayer’s level of well-being is not statistically significant.. There was also no statistically significant difference between income, deductions of a social nature, and exemptions in their relationship to the taxpayer’s level of well-being.

The recommendations included the need for the government to  adopt a rational tax policy, carry out comprehensive reforms in the tax system and its administration, rationalize the amendment processes in tax laws to ensure balance in achieving economic and social tax objectives, and take into account, in  future legal amendments, the need to raise the level of welfare of the ordinary taxpayer through granting more socially oriented  incomes exempts and increasing expenditures of a social nature in a manner that enhances a decent living for the taxpayer  and their family, and preserves the collection capacity of the tax system. Finally, more family exemptions should be adopted in  respect for the elderly, the young, and the disabled .