Many taxpayers who earn an income from more than one source - including widows who receive a spousal pension and taxpayers who change jobs during the tax year - face a nasty surprise when they submit their tax returns because they have paid too little tax during the year. This can be as a result of the rebate being applied by each employer or pension provider, or the aggregation of income pushing the taxpayer into a higher tax bracket. The problem worries the government to such an extent that the Treasury plans to test some proposals to address the issue during the coming year. Chris Axelson, the chief director of economic tax analysis at the Treasury, says many widows of government employees find that when their tax returns are assessed they owe unmanageable amounts of tax as a result of too little pay-as-you-earn tax being deducted from their monthly pensions and other income. The Income Tax Act was amended to allow annuity (pension) providers and employers not to deduct the prima...

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