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Income redistribution on the way

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The Chinese government said in the Twelfth Five-Year Plan, China's economic blueprint for the next five years, that efforts should be made to rationalize income distribution system, cement the role of tax policies in income distribution adjustment in which excessively high incomes would be adjusted, and reduce the widening gaps between urban and rural areas and among different industries.

In the government work report delivered at the annual NPC session, Premier Wen said: "We will not only make the 'pie' of social wealth bigger by developing the economy, but also distribute it well on the basis of a rational income distribution system."

Target 1: Raise personal income tax threshold

"China has approved a draft plan for an amendment to the personal income tax law that would raise the threshold of taxable personal income, the State Council announced March 2, adding that the plan would be submitted to the National People's Congress, the country's top legislature, for review."

----From the government work report

A review of personal income tax (PIT):

■China promugated the Personal Income Tax Law and decided to set the taxation threshold at 800 yuan in 1990.

■On October 27, 2005, China's top legislature decided to raise the PIT threshold from 800 yuan a month to 1,600 yuan. The decision came into force on January 1, 2006.

■On December 29, 2007, the standing committee of the People's Congresss passed an amendment to the Personal Income Tax Law.

■The Chinese government raised the PIT threshold from 1,600 yuan a month to 2,000 yuan in March 2008.

The following is a chart of change of PIT threshold over last twenty years:

Related storires:

• Income tax threshold to be raised • China to address widening income gap

• Income distribution reform on the way • Prioritize people's prosperity

• University president cautions against growing income gap

• Salary growth expected to accelerate

Target 2: Rise in the CPI will be held around 3 percent

"To keep price rise in check, the government will make the most of the favorable conditions, such as the oversupply of major industrial products, ample grain reserves and abundant foreign exchange reserves."

----From the government work report

The following is a chart of CPI&PPI growth year-on-year rates:

• China's February inflation to further drop

Target 3: increase rural incomes

"The central government plans to allocate 818.3 billion yuan ($119.8 billion) for agriculture, farmers, and rural areas this year, an increase of 93 billion yuan over the 2009 level. Of the total funding, up to 133.5 billion yuan will be spent to subsidize agricultural production, a year-on-year increase of 6.04 billion yuan."