It is a pity that the threshold of individual income tax was not raised at the recent Central Economic Work Conference, says an article in Beijing News.
The Chongqing Times reported adjustment of the threshold had been postponed and related topics were not on the agenda of the Central Economic Work Conference.
An ideal individual income tax system should be one in which the rich pay more to subsidize the poor while middle and low-income earners pay less tax.
But at present, ordinary wage earners bear the brunt of taxes. This is unfair and goes against the goals of the tax system.
According to latest statistics, the average monthly salary of an ordinary urban wage earner in China is 2,192 yuan ($320) while the existing tax threshold is 2,000 yuan. We should raise the threshold to make these workers, the majority of the workforce, who earn monthly salaries of around 2,000 yuan, pay no taxes.
It is generally believed that the threshold needs to be raised to a proper level so that fairness of the tax policy can be seen. Moreover, the rise will also help stimulate domestic consumption and demand.
(China Daily December 22, 2008)