Income tax cutoff point lifted to 1,600 yuan
(Xinhua)
Updated: 2005-10-23 09:15

China's monthly personal income tax cutoff point was lifted to 1,600 yuan from 1,500 yuan after drawing on public opinions from the first-ever legislature hearing held on Sept. 27.

The cutoff point of 1,600 yuan has been written into the amendment draft of the personal income tax law, which was submitted to the 18th session of the Standing Committee of the 10th National People's Congress (NPC), beginning on Saturday, for the second reading.

The amendment draft was probably voted for adoption at the six-day legislative session.

China's monthly personal income tax cutoff point has been fixed at 800 yuan for more than ten years.

In August, top legislature read the amendment draft of law on personal income tax for the first time. The draft proposed lifting the monthly personal income tax cutoff point from 800 yuan to 1,500 yuan, so as to accord with the economic growth and ease tax burden of poor citizens.

But on the parliamentary hearing, most participants held that the tax cutoff point of 1,500 yuan was still low and should be further raised.

According to the newest statistics offered by the NPC Standing Committee, among 20 participants of the parliamentary hearing, six believed that the deduction point of 1,500 yuan was appropriate, 12 thought the cutoff point should be higher and another two held that the personal income tax cutoff point should be lower than 1,500 yuan.

After a full consideration of public opinions from the hearing,the draft amendment of the law on personal income tax for the second reading, lifted the personal income tax cutoff point from 1,500 yuan to 1,600 yuan.

"The difference of 100 yuan might be a slight change for the personal income tax reform, but a "big step forward" for the country's democratic progress," acknowledged Yang Qin, a participant of China's first ever legislative hearing who is working for the Guangdong Foshan branch of China Netcom.

Though Yang held that 2,000 yuan should be an ideal monthly personal income tax cutoff point in his speech at the parliamentary hearing, he still felt satisfied with the result, because "public opinions have influenced the country's legislation and policy making," he told Xinhua.

He Yongjian, an official with the Legislative Affairs Commission under the NPC Standing Committee, said the adjustment of tax deduction point should fully consider not only public opinions, but China's financial capability, and the present national conditions.

The state coffer could afford the monthly personal income tax deduction point of 1,600 yuan, and tax collection from high-income groups will be intensified to refill the central finance, said He.

Moreover, he explained the personal income tax deduction point only slightly lifted this time, also because too high income tax cutoff point may cause a sharp decrease of tax revenue in those under-developed provinces and weaken the central finance's capacity to support the development of poor areas.

He said the parliamentary hearing on personal income tax deduction point has drawn enthusiastic response from people of all circles of society. And China's 20-plus provincial legislative bodies had held legislative hearing. China's top legislature was trying to sum up experience and might finally form a regular parliamentary hearing system, in an effort to further ensure the country's legislative transparency.