Statement — The Government has appealed to all citizens to pay income tax honestly and to file returns reflecting true income levels so that development activities can be carried out.\n\nAssumptions —\nI. People may respond to the appeal and start paying more taxes honestly.\nII. Total income-tax collections may increase considerably in the near future as a result of better compliance.

Introduction / Context:
A public appeal by the Government to “pay honestly” and “file true returns” indicates an attempt to change taxpayer behavior and, through that change, to strengthen public finances for development. Such messages typically rest on two intertwined beliefs: that people will respond (at least partially) to the appeal and that improved compliance will raise aggregate collections.

Given Data / Assumptions:

• An official appeal urges truthful reporting and payment.
• Assumption I: some taxpayers may change behavior in response.
• Assumption II: improved compliance will meaningfully increase total revenue.

Concept / Approach:
Statement–assumption problems ask what must be presupposed for the statement to be a sensible course of action. If appeals never affect behavior, issuing them would be pointless. Likewise, if truthful filing did not increase revenue, the appeal would not be framed as enabling development spending. Hence both assumptions undergird the statement’s rationale.

Step-by-Step Solution:

Verification / Alternative check:
Even if only a portion of taxpayers respond, the appeal still makes sense. Collections need not skyrocket; a “considerable” rise relative to baseline suffices. Both conditions align with the statement’s purpose.

Why Other Options Are Wrong:

Common Pitfalls:
Assuming the appeal must guarantee universal compliance. The assumption is only that compliance rises enough to matter.

Final Answer:
Both Assumption I and II are implicit.