贵人鸟官方网店:China plans tax change to address inequality ...

来源：百度文库编辑：九乡新闻网时间：2024/04/29 23:31:16

China plans tax change to address inequality

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A Beijing worker washes a window; low-paid laborers would get some tax relief under China's new plan

China plans to cut taxes for people with lower incomes and raise them somewhat for the rich under new legislation expected to pass shortly, one effort to address a widening income gap thought to threaten the country's social stability.

Proposed revisions to the tax code reviewed by the legislature on Wednesday would raise the lowest level of monthly income that is subject to taxation to 3,000 yuan ($460) from the current 2,000 yuan ($305). The minimum wage of a Chinese worker in Beijing is 1,160 yuan ($178) a month.

The new tax law would reduce the number of marginal tax brackets to seven from nine, the Ministry of Finance and the State Administration of Taxation said in a joint statement on their websites.

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The maximum threshold for the bottom two brackets would be raised, so that workers earning up to 4,500 yuan ($690) a month would pay a marginal tax rate of 10%. According to the statement, 94% of Chinese taxpayers fall within that threshold.

Two brackets, with rates of 15% and 40%, would be eliminated, meaning more taxpayers would qualify for the top marginal rate, which will remain at 45%.

Growing income inequalities undermine the Chinese Communist Party's overriding goal of political stability. That fear underpins calls for a "harmonious society" that have defined the leadership philosophy of Chinese President Hu Jintao and Premier Wen Jiabao.

Resentment over paying taxes is also rising among many Chinese, with some activists in recent years demanding more transparency about how taxes are spent.

Unlike in major Western economies, individual income taxes make up only a small portion of government revenue in China, partly by design and partly because of widespread tax evasion. For that reason, analysts say, the effect of the proposed changes on government finances and the overall economy would be small.

"We do not expect the reform to reduce tax revenue significantly," said Citigroup economists Minggao Shen and Ken Peng in a note. "A modest boost to domestic consumption is likely given the high consumption propensity of low-income households."

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Last year, income taxes accounted for only 6.8% of the central government's revenue, according to the Ministry of Finance. The largest sources were sales taxes and value-added taxes levied on foreign imports, at 25% of revenue, followed by value-added taxes on domestic goods at 20%.

Tax changes have been widely anticipated since last month, although the details weren't revealed until Wednesday. The law is being reviewed by the Standing Committee of the National People's Congress, the state-run Xinhua News Agency said Wednesday, indicating that the changes may be finalized and become law imminently.

As inflation accelerates and residents' share in overall national income shrinks, Chinese urban workers have been calling for personal income tax cuts.

While Beijing promised to cut personal income taxes for wage earners, it also vowed to raise taxes for rich residents.

AP/Reuters

While different voices can be heard:

Some of the senior leaders in the SOEs, like Ren Zhiqiang (Chairman of Hua Yuan Real Estate Group), claim that this new tax change policy, to some extent , is another kind of inequality. With an annual income of 7.5 million, Ren finally can only get less than half of that sum, after paying 48% income tax and other have-tos. A the same time, some actors may earn as high as 5 million yuan by starring one film, but just pay a small amount of tax, that is 20% of proceeds. While some private enterprises owners may pay even less taxes or taking advantage of legal loopholes evade their due taxes.

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