|
Income-tax threshold raised to 1,600 yuan
(chinadaily.com.cn/China Daily)
Updated: 2005-10-27 15:59
China's top legislators adopted Thursday, October 27, a revised Personal
Income Tax Law, raising the threshold for monthly personal income tax from
800 yuan (about US$100) to 1,600 yuan (US$198), a move that will help ease
tax burdens on wage earners and create a more equitable society.
A man walks past a
sign advocating people to file tax returns in Shanghai in this undated
photo. China's legislature adopted the revised personal income tax law,
raising the threshold for tax payment to 1,600 yuan.
[newsphoto] | The amendment will become effective next year.
The Standing Committee of the 10th National People's Congress (NPC) also
approved the amendments to the Securities Law and the Company Law.
"It will ease the burden on low- and middle-income people, mainly
wage-earners such as migrant workers and employees at enterprises," Han
Baojiang, economics professor of the Central Party School of the Communist Party
of China, said in an interview with China Daily on Sunday, October 23.
The central authorities have started to use taxation as a tool to achieve the
goal of building a "harmonious society," said Han.
This is only the first step, he said, more measures will follow, such as the
adoption of an inheritance tax.
The new threshold was raised from 1,500 yuan (US$185) in a previous draft of
the law revision after the country's top legislature held the first-ever public
hearing in Beijing last month.
A total of 20 representatives from all walks of life voiced their views and
gave their proposals, with most agreeing that the cut-off point should be
raised. The move was widely hailed as a good example of heeding public opinion
while formulating legislation.
Top lawmakers, while deliberating and adopting the income tax law amendment,
accepted their proposals, setting the deduction level at 1,600 yuan.
In 1994, China began levying income tax on citizens earning more than 800
yuan (about US$100) but only 1 per cent of people were earning more than that;
now, about 60 per cent earn that much.
The increased threshold will not have a bearing on foreigners working in
China as they pocket 4,000 yuan (US$495) tax-free each month.
But many foreign businessmen and enterprises are likely watching with
interest as most of their employees are Chinese. In addition, procedures for tax
deduction by companies at source would be greatly simplified.
He Yongjian, an official with the Legislative Affairs Commission under the
NPC Standing Committee, said that the State could afford the raised threshold;
and efforts to collect tax from high-income groups would be intensified.
The State coffers may lose 20 billion yuan (US$2.5 billion) a year with the
implementation of the new policy, Shi Yaobin, head of the Taxation Department of
the Ministry of Finance, said earlier.
|
