Chinese wage earners to pay 28 billion yuan less in personal income tax
China's wage earners are expected to pay about an annual amount of 28 billion yuan (3.45 billion US dollars) less in personal income tax as of next year thanks to the country's plan to double income tax threshold, tax officials said Wednesday.
China's legislature on Oct. 27 made a decision to raise the threshold of the monthly personal income tax from the current 800 yuan (98 US dollars) to 1,600 yuan (196 US dollars), effective from Jan. 1, 2006.
An official with the State Administration of Taxation said China has taken three factors into account when it moved to readjust the threshold, which are the rational assessment of people's life expenditure, benefiting middle and low income earners, and the capability of the State to sustain the reduction of income tax.
The per-capita yearly income for an employee stood at 16,024 yuan (1,789 US dollars) in 2004, while per-capita annual life expenditure was 7,182 yuan (886 US dollars), and each wage earner had to pay 13,718 yuan (1,693 US dollars) in family expenditure.
The monthly life expenditure each wage earner had to pay for his or her family would be 1,143 yuan (141 US dollars), varying from 1,381 yuan (170 US dollars) in the rich eastern part of the country, to 929 yuan (114 US dollars) in the middle part and 1,012 yuan (124 US dollars) in the west.
China's total personal income tax revenue in 2004 was 173.7 billion yuan (21.4 billion US dollars), from 7.3 billion yuan (901 million US dollars) in 1994, when China introduced new tax system.
China began to introduce personal income tax since Sept. 1980.
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