Statement — The income-tax rules need to be amended so that people have greater incentive to declare their actual wealth. Assumptions — I. The current income-tax rules are inadequate or sub-optimal. II. Some people do not declare their actual wealth under the present rules.

Introduction / Context:
Policy-change statements usually presuppose (a) that the status quo is inadequate and (b) a specific behavioral problem exists that the change aims to address. Both are present here: current rules are not producing truthful declarations, and amendments are proposed to fix that.

Given Data / Assumptions:

• Proposal: amend rules to increase incentives.
• I: current rules are not proper/effective enough.
• II: under-reporting or non-declaration exists.

Concept / Approach:
A remedy presupposes a malady. Without II, there is nothing to fix. Without I, there is no reason to change rules.

Step-by-Step Solution:

Verification / Alternative check:
If everyone already declared accurately (¬II), amending rules for “more incentive” would be pointless, contradicting the statement.

Why Other Options Are Wrong:

Common Pitfalls:
Confusing “improper” with “illegal.” Here “not proper” means not adequate or effective.

Final Answer:
Both Assumption I and II are implicit.