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China's top legislature is to amend a law for lifting the start-line of personal income tax collection.
According to the draft amendment, the personal tax collection starting line will be increased from the current 800 yuan (98.6 US dollars) to 1,500 yuan (185 US dollars) so as to relieve the tax burden for the middle and low-income groups.
The draft amendment of the law on personal income tax was submitted to the 17th session of the Standing Committee of the National People's Congress (NPC) for first deliberation on Tuesday.
Liu Jibin, vice chairman of the NPC Financial and Economic Committee (FEC) said that the current law on personal income tax, which was officially implemented in 1983, has played a significant role in regulating income allocation and increasing the country's tax revenues.
"However, with the constant economic development and the rapid improvement of citizen's living standards, the current law on personal income tax cannot meet the actual needs and should be amended," said Liu.
The old tax threshold, determined according to the average income level, has not been raised since the personal income law was adopted in 1980. At that time, a monthly salary of 800 yuan was beyond the imagination of most Chinese people who lived on a monthly income of merely tens of yuan.
But China had quadrupled gross domestic product (GDP) within two decades by 2000. Last year the country's per capita GDP exceeded 10,000 yuan (US$1,230).
In the first half of this year, the per capita disposable income of urban residents reached 5,374 yuan (US$663) while their rural cousins on average netted 1,586 yuan (US$196) in cash, up 9.5 per cent and 12.5 per cent respectively over the same period last year.
Personal income tax has become a hot topic in recent years, because the threshold for taxation which stands at 800 yuan was considered too low and some rich people managed to evade taxes.
(CRI August 23, 2005)
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