80pc oppose proposed new tax threshold

PUBLISHED : Friday, 17 June, 2011, 12:00am
UPDATED : Friday, 17 June, 2011, 12:00am


More than 80 per cent of respondents to a poll disagree with the government's plan for reform of the personal income tax, putting further pressure on officials to revise the proposal, first tabled for discussion in the nation's top legislature months ago.

Just 15 per cent of respondents supported a proposed amendment to lift the threshold for taxable monthly income from the present 2,000 yuan (HK$2,400) to 3,000 yuan, according to an online survey conducted by the Standing Committee of the National People's Congress.

The poll was conducted on the top legislature's website between April 25 and May 31, and received responses from more than 82,000 people, the committee's Legislative Affairs Commission said in a statement. The public consultation campaign also received letters from academics and ordinary citizens.

The NPC Standing Committee examined the draft amendment to the income tax law for the first time in April, but lawmakers could not agree on the proposal, so they decided to delay a vote on the change. Some members felt the proposed change was too small, according to mainland media reports.

The latest survey suggests that the public remains divided on the amendment. Some 48 per cent of respondents believed that the proposal needed further modification, while 35 per cent objected to it outright. Among those who wanted further changes, most proposed lifting the threshold to between 3,500 yuan and 10,000 yuan, with 5,000 yuan the figure that most suggested.

'[We] should adopt different thresholds to reflect different living costs in different regions, such as 5,000 yuan, 4,000 yuan and 3,000 yuan, respectively,' the statement quoted Li Daokui , a leading economist and an adviser at the People's Bank of China, as saying. The statement also quoted several respondents as saying that 3,000 yuan was barely enough to live on in expensive cities such as Beijing and Shanghai.

While Beijing has promised to lift the personal income tax threshold to help low- and middle-wage earners, it also vowed to raise taxes for wealthy citizens.

The proposed amendments were part of the government's effort to reduce yawning income gaps that the Communist Party leadership fears could fuel social unrest. It is also in line with the government's effort to restructure the development model, shifting away from its reliance on capital investment and exports to a model mainly driven by private consumption.

As inflation accelerates and residents' share of overall national income shrinks, urban workers have been calling for cuts in their personal income tax levels.

The mainland's personal income tax revenue ballooned in the past decade to 483.7 billion yuan last year, from 41.4 billion yuan in 1999, thanks in part to enhanced tax collection. In the first quarter this year, personal income tax revenue totalled 203.85 billion yuan, an increase of 37 per cent from a year earlier, while the economy grew 9.7 per cent and per capita disposable incomes in urban areas rose 7.1 per cent.

Some officials have said the proposed new tax threshold of 3,000 yuan is high enough, as the change would cut the country's personal income tax by 99 billion yuan.

Finance Minister Xie Xuren recently said that the proposed new tax rate would benefit some 200 million taxpayers, with the proportion of the population paying taxes falling from 28 per cent to just 12 per cent.

However, experts said the reduction in the amount of personal income tax would have a limited impact on fiscal revenue, as it accounts for only 6.3 per cent of the country's tax revenue.

The NPC Standing Committee said it would discuss the amendment again during a coming session from June 27 to 30.

850 yuan

The minimum monthly wage, in yuan, in some Guangdong cities. In Guangzhou, it is 1,300 yuan

Source: The China Labour Consultation Network