Proposed changes to personal income tax in China will reduce the burden on taxpayers while contributing to social fairness, the Party-run Guangming Daily editorializes.
The 13th National People’s Congress Standing Committee is now reviewing a draft amendment to the Individual Income Tax Law. The personal income tax threshold is expected to be raised to 5,000 yuan (US$770) per month from the current 3,500 yuan (US$540). And expenses like childrens' education, the treatment of serious diseases, rent and mortgage interest payments will be deductible. This would be the seventh amendment to China's tax law since it was introduced in 1980.
Raising the personal income tax threshold for low-and lower-middle income families will ease financial pressure on them, while newly added tax deductions will help combat rising living costs. Specific rates for tax deductions in each category will help prevent tax evasion. Currently, the rich are able to evade taxes by shifting their income to categories that invite a lower tax rate, and taxing different sources of income is a good way to cope with the problem and boost fairness in paying taxes between wealthy people and salaried persons.
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