China has raised the level at which citizens must start to pay income tax to 3,500 yuan ($542) per month from 2,000 yuan, the official Xinhua News Agency said on Thursday, offering a bigger concession to taxpayers than expected. Xinhua said the standing committee of the National People's Congress had decided to lift the threshold for paying personal income tax from a previously proposed 3,000 yuan after a rare public outcry.
"The change was made thanks to the appeal by netizens and comments that we received (to the initial proposal), 83 percent of which were negative," lawmaker Ye Qing said on weibo.com, China's version of Twitter. Wang Jianfan, a tax official with the Ministry of Finance, told a media briefing that the move will cut the tax burden for low- and middle-income residents.
He said the tax change would reduce China's fiscal revenue by 160 billion yuan a year. The Ministry of Finance had initially proposed to parliament raising the tax threshold to 3,000 yuan, which lawmakers published online for public feedback. The proposal received 230,000 comments in just a month, a record number for any drafted law, of which only 15 percent expressed support for the plan. Many argued that the 3,000 yuan monthly threshold was too low to reflect rising prices. Although only about 12 percent of the country's 300 million labour force earn more than 3,000 yuan per month, personal income tax is a sensitive issue for young and Internet-savvy workers in Beijing, Shanghai and other cities.
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