Royal and Provincial Tax Act of 2020
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The Royal and Provincial Tax Act of 2020 is an act of the Conshilía Daoni which made significant overhauls to the tax system of Urcea. The Act, which amended the Tax Law, Province Law, Crownland Law, and State Law, abolished the three types of different taxes levied by the Government of Urcea on the three types of subdivisions. These taxes were replaced by a direct income tax on all citizens of Urcea regardless of where they lived, and also leveled various administrative fees and specific-application use taxes. The Act, which was a major campaign platform of Bridget Farrell and the National Pact, was passed on a party line vote of 290-210. It proved to be an extremely contentious issue in the 2020 Urcean elections. In the 2021-22 fiscal year, the Government of Urcea reported a "significant surge" in state budget incomes as a result, and many analysts have suggested that the increase in taxes helped Urcea pay for the Final War of the Deluge.
Background
Prior to 2020, each of the three types of subdivisions paid a different type of tax. In the crownlands, the government (on behalf of the King personally) directly levied Royal Dues, a type of income tax assessed at a progressive rate on individuals. In the provinces, the Provincial Due was taken; rather than a personal tax, this is taken from the total incomes of the provincial government at a flat rate throughout the Kingdom. The rate in 2016 was 25.6%. In the semi-autonomous states, citizens pay the Sovereign Income Tax; the flat tax rates of which are determined by the semi-autonomous governments at a rate no lower than 12.5%, and both Ænglasmarch and Gassavelia set their rates at such. The Provincial Due and Royal Due rates could only be raised by an act of the Conshilía Daoni on the initiative of the Procurator.
Criticism
The Act was extremely controversial, especially so among the people of Gassavelia and Anglei who believed that the lower flat tax was a special privilege afforded to their people as a consequence of their union with the Urcean people. Those States largely voted against the National Pact in the 2020 Urcean elections as a result.