Date:13/06/11

Tax proposal in China gets massive online feedback

Over 230,000 online feedback was received by China’s top legislature upon requesting for public submissions on its website on a draft tax amendment. The Standing Committee of the National People’s Congress (NPC) issued a draft amendment mandating a raise in the minimum threshold for personal income tax from 2,000 yuan (US$306) per month to 3,000 yuan to the Personal Income Tax (PIT) Law on its official website, www.npc.gov.cn on April 25.
By May 31, the deadline for submissions, over 230,000 voiced out their opinion on the draft amendment, breaking all existing records.
Before the event, the record high was in 2006, when more than 190,000 submissions were received when the legislative body publicised the draft Labor Contract Law.
The draft amendment was designed to improve the living standards of the country’s middle- and low-income earners, for the attainment of a fairer income distribution.
China employs a nine-bracket progressive rating system, applying a minimum tax rate of 5 per cent to taxpayers earning between 2,000 to 2,500 yuan, and a maximum rate of 45 per cent for those earning more than 102,000 yuan every month. The draft amendment states that the minimum tax rate of 5 per cent will be applied to those earning between 3,000 yuan to 4,500 yuan, while the peak rate will cover those making over 82,000 yuans a month.
Officials estimate that more than 200 million people belonging to the working class will benefit from the raise in the minimum PIT threshold. More than 200 million people of the country’s working class will stand to benefit from lifting the minimum PIT threshold. If the personal income tax threshold is lifted, only about 12 percent of the working class will have to pay taxes, down from the current 28 percent, according to officials.

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