新的个人所得税

One year after China’s latest personal income tax regulation came into effect, it remains a hot topic among the income-earning individuals it affects. While it’s helped many, there has also been discussion on how to further improve the tax system.

A typical day for 56-year-old Liu Jianru, who is busy preparing a meal for her husband to have when he returns from work. Liu has been retired and stayed at home for years. Besides her retirement pension, the family’s daily expenses all depend on her husband’s wages. The raised tax threshold means more money in Liu’s pocket.

Beijing resident Liu Jianru said,“We are able to save nearly 100 yuan each month ever since the new standard came into force. For many white-collar workers, such a small amount of money may mean little, but for us, it can buy more eggs and add at least one more dish for my family everyday.”

Starting from last September, the new tax threshold of 3,500 yuan was used in calculating the monthly personal income tax of wage earners. That means 60 million more people are exempt from paying personal income tax.

But even though this helps people like Liu, she still feels the pinch, especially since her grandchild was born 4 months ago.

Liu said,“Although the income tax is eased, we still live on a relatively low wages. Especially since my grandson was born, it is hard to pays all the living costs.”

For many like Ms. Liu, raising the personal income tax threshold has helped to relieve some of their economic burdens. But a further reform is under discussion to make the tax system even more fair and beneficial to the public.

One popular suggestion is to move individual income tax toward a system based on gross family earnings. Many believe that will help reflect the actual financial status of taxpayers, as even at around the same income level, family expenditures, including education and elderly care, can vary substantially.

But experts say that family-based tax collection will be difficult to pull off in the short-term, as the change will require a complete overhaul of the current taxation system.

Jia Kang, President Inst. of Fiscal Science, Finance Ministry, said, “The family-based income tax system requires sophisticated management. The country’s large population will pose a major challenge in verifying information filed by taxpayers. Authorities will have to make great efforts to make it happen.”

Jia says the ultimate goal for personal income tax is to adjust the income levels. Including other income sources might be the next step to ensure a fair tax system.