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New tax proposal keeps monthly threshold at 3,000 yuan
By Zhang Fengming |
June 27, 2011, Monday
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Online Edition
Online Edition
THE second draft of China's new tax income proposal has kept the monthly exemption threshold on individual income tax at 3,000 yuan (US$462) in spite of the public opinion that the exemption is too low to reflect higher living cost.
The Standing Committee of the National People's Congress started their second deliberation of the tax law amendment today.
The top lawmakers do revise the proposal in another way to echo the public's demand of lower tax burden by cutting the lowest tax bracket from 5 percent to 3 percent.
Currently, individuals earning under 2,000 yuan per month do not have to pay income tax. In the first proposed amendment, the exemption is set to be raised to 3,000 yuan. The top lawmaker didn't pass the proposal during its first review on the proposal and turn to solicit public opinions before the second review.
"I feel a little bit disappointed on the result after all the talks about possible further increase on the exemption," said Sun Xiaobu, a white-collar worker in Shanghai. "But increase to 3,000 yuan is better than nothing."
China currently levies tax progressively on personal salary in nine brackets ranging from 5 percent to 45 percent. Under the proposal now being considered, the 15 percent and 40 percent brackets will be cancelled, and more people would be eligible to enjoy the 3 percent to 10 percent brackets.
The top law maker received 237,684 public opinions and suggestions from April 25 to May 31, with 15 percent of them favoring raising the exemption to 3,000 yuan.
However, 48 percent suggested further raising the exemption to 5,000 yuan per month.
The income tax threshold was raised from 800 yuan to 1,600 yuan in 2006, and to 2,000 yuan in 2008. The 800 yuan figure was set in 1980, when earning that amount a month was a dream for many.
Market watchers said they already holds the view that 3,000 yuan exemption is odds-on as a higher exemption may be too much for the government to digest, factoring in the economic development in vast less developed areas.
China collected 7.3 trillion yuan of tax in 2010, up 23 percent than a year ago. China's economy grew 10.3 percent in 2010.
Last year, individual income tax grew 22.5 percent to 483.7 billion yuan, up 16.4 percentage points than a year ago. The individual income tax accounted for about 6 percent of China's fiscal revenue last year.
The Standing Committee of the National People's Congress started their second deliberation of the tax law amendment today.
The top lawmakers do revise the proposal in another way to echo the public's demand of lower tax burden by cutting the lowest tax bracket from 5 percent to 3 percent.
Currently, individuals earning under 2,000 yuan per month do not have to pay income tax. In the first proposed amendment, the exemption is set to be raised to 3,000 yuan. The top lawmaker didn't pass the proposal during its first review on the proposal and turn to solicit public opinions before the second review.
"I feel a little bit disappointed on the result after all the talks about possible further increase on the exemption," said Sun Xiaobu, a white-collar worker in Shanghai. "But increase to 3,000 yuan is better than nothing."
China currently levies tax progressively on personal salary in nine brackets ranging from 5 percent to 45 percent. Under the proposal now being considered, the 15 percent and 40 percent brackets will be cancelled, and more people would be eligible to enjoy the 3 percent to 10 percent brackets.
The top law maker received 237,684 public opinions and suggestions from April 25 to May 31, with 15 percent of them favoring raising the exemption to 3,000 yuan.
However, 48 percent suggested further raising the exemption to 5,000 yuan per month.
The income tax threshold was raised from 800 yuan to 1,600 yuan in 2006, and to 2,000 yuan in 2008. The 800 yuan figure was set in 1980, when earning that amount a month was a dream for many.
Market watchers said they already holds the view that 3,000 yuan exemption is odds-on as a higher exemption may be too much for the government to digest, factoring in the economic development in vast less developed areas.
China collected 7.3 trillion yuan of tax in 2010, up 23 percent than a year ago. China's economy grew 10.3 percent in 2010.
Last year, individual income tax grew 22.5 percent to 483.7 billion yuan, up 16.4 percentage points than a year ago. The individual income tax accounted for about 6 percent of China's fiscal revenue last year.
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