Shanghai Daily: Business - shanghaidaily.com
CHINA is proposing to raise its monthly individual income tax levy threshold from the current 1,600 yuan (US$217.69) to 2,000 yuan, according to a draft amendment to the law on individual income tax. The threshold increase is to help medium- and low-income earners hit by the recent price increases of some goods. Yesterday, the draft amendment was submitted to the Standing Committee of the National People's Congress, China's top legislature, for deliberation. The amendment is expected to take effect from March 1. Finance Minister Xie Xuren told the legislative session that "raising the threshold of individual income tax collection from 1,600 yuan to 2,000 yuan means a reduction of 30 billion yuan in state revenue." The rise in the threshold would free 70 percent of income earners from paying income tax. The current threshold of 1,600 yuan exempts 50 percent of income earners from tax. Xie said: "The increase of individual income tax collection threshold is