Most want income tax threshold to be raised
By Zhao Huanxin (China Daily)
Updated: 2005-09-28 06:12

They debated, they differed and dug deep for a solution to a vexing issue: How can personal income tax be levied to benefit as many as possible while at the same time ensuring State finances do not suffer too much?

The two main concerns were: what should be the income threshold to pay taxes and whether there should be a unified tax rate across the country?

A Philips employee attends the hearing on raising income tax threshold in Beijing September 27, 2005. [Xinhua]

While no conclusion was meant to be reached at the country's first-ever legislative hearing on the hot-button issue held yesterday in Beijing, it is clear that people's views are actively being sought on a matter of national concern.

Whatever the eventual outcome, foreigners - who pay income tax only if their monthly income exceeds 4,000 yuan (US$493) - would not be affected, said a senior taxation official.

But many foreign businessmen and enterprises are likely to be keenly watching developments as most of their employees are Chinese and changes would have a bearing on their income levels.

Last month, the National People's Congress (NPC), the top legislature, deliberated but was divided on a draft amendment to the Law on Personal Income Tax, which proposed raising the threshold at which income tax is levied from 800 yuan (US$99) to 1,500 yuan (US$185) per month.

A public hearing was then called to solicit opinion from various circles.

Yesterday, 17 of the 20 speakers - including civil servants, academics and migrant workers - chosen from nearly 5,000 applicants, favoured raising the starting line to 1,500 yuan or higher, with some suggesting 3,000 yuan (US$370).

But there were differences over whether there should be a unified threshold covering the whole country or allowances made for regional differences.

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