Chinese Can Expect Income Tax Break, Report Says

Chinese people are likely to pay less in income tax, as China is amending its tax policies and plans to level up the individual income tax base from the current 800 yuan (US$97) to 1,500 yuan, the Wenhui Daily reported yesterday.

Besides raising the tax bases, the new policy will probably enlarge the tax-free portions and will make the tax collection based on the yearly incomes, instead of the monthly salaries, the report said.

"Eight-hundred yuan use to mean a large sum in 1980, when the tax base was first ruled," Yang Chunping, vice director of Beijing's taxation bureau, said. "But now, as people's incomes have been greatly raised, that's really a small sum, and more than 3.2 million Beijingers are paying the income taxes."

But that's unfair, some experts said.

They argued, since tax is a vehicle to narrow the income gaps in a society, it should mainly aim at the high-income earners and it's not right to have people with low income and high income taxed on the same bases.

Meanwhile, to tax people with the same salaries but different burdens at the same rates is also unfair, they said.

"If one person is married and has a child, while the other remains single, the first one is obviously more burdened than the latter," Ji Zhiming, professor specialized in taxation laws, said.

Similarly, to tax the incomes through different means at the same rates is not fair, Ji said.

Under the current tax laws, a person earns 27,000 yuan from the work should be levied up to 45 percent income tax, while another one who makes the same income by renting out the properties will only pay a 20-percent tax.

To make the tax laws fair to everyone and to prevent tax-cheaters as well, experts suggest China should set up a tax record system as many other countries do to track all the incomes and expenses of a person.

"China is in study of how to link a person's tax record with the ID card system," Yang said.

( October 26, 2001)

In This Series

Majority of Chinese Expect Higher Income

People Still Favor Savings

Private Businessmen, White-Collar Professionals Top Income Rank

Residents' Deposits Exceed 7 Trillion Yuan

Income Tax Rate in Western China to Be Reduced

Ministry Reveals Wide Income Disparity among Chinese

Tax Collectors Hope to Help Balance Widening Income Gap

Strategy Sought to Increase Rural Consumer Demand



Web Link