A new tax policy raising the monthly personal income tax threshold to 3,500 yuan ($542) from 2,000 yuan ($309) will reduce the number of Ningxia residents paying income tax from 81,400 to 37,200, the local tax department said.

The revenue from individual income taxes is expected to drop more than 50 percent after the new deal takes effect on Sept. 1.

Tax department statistics show that revenue from individual income tax from January to May hit 952 million yuan ($147 million), up 54 percent over the previous year.