Beijing is preparing to raise the minimum income standard for personal income tax as a debate over the issue continues to dominate newspaper headlines, state media reported yesterday.
Quoting Shanghai Television, the Sina news Web site said yesterday: 'Our reporters have learned from experts who took part in taxation reforms that the minimum income standard for income tax will be raised. As a result, wage earners will benefit most from the adjustment.'
Citizens who earn 800 yuan (HK$752) or more a month are required to pay personal income tax. The report said the authorities had yet to decide on the new threshold.
It quoted Hu Yijian, vice-president of Shanghai University of Finance and Economics, as saying the 800-yuan standard was set in the 1980s and needed adjustment.
China is currently embroiled in a national debate over the issue of evasion of personal income tax. The debate was sparked by recent remarks by Premier Zhu Rongji that many of China's millionaires do not pay income tax and that he had ordered tax departments to go after these tax dodgers.
Mr Zhu's criticism of the millionaires was interpreted by analysts as an assurance to conservatives within the Communist Party who are critical of the widening wealth gap on the mainland.
The premier's remarks - which were widely reported in national media - came just months ahead of the 16th Communist Party Congress in September or October where delegates are expected to debate how to cope with China's rapidly changing social landscape.
