The Beijing municipal government's recent decision to raise the
level of personal income exempt from tax has aroused close
attention from experts and local residents.
Personal income up to 1,200 yuan (US$145) per month will not be
taxed in Beijing from this month, 200 yuan (US$24) more than the
old level, the Beijing Municipal Local Taxation Bureau announced
earlier this week, which means that tax will be collected only on
monthly income in excess of 1,200 yuan.
"The change is being made to correspond to the significant rise
in personal income since 1999, when income tax was paid on income
over 1,000 yuan (US$121)," Song Bangjie, vice-director of the
personal income tax department under the bureau, said in an
interview.
"The amount of income exempt from tax must take current living
needs and consumer prices into consideration," Huang Hua, associate
professor of the taxation department under the Central University
of Finance and Economics, said, agreeing with the new tax change in
the capital.
The level of income exempt from tax in Guangzhou, in South
China's Guangdong Province, is 1,260 yuan (US$152), and in Shanghai
1,000 yuan (US$121).
Huang suggested, however, the taxation system be reformed
further to make it more reasonable.
"I think the standard should not be fixed, as people with
similar incomes bear different financial responsibilities," Huang
said.
The professor thinks her idea may possibly be adopted within the
next 10 years, but she is not overly optimistic. "China's personal
income system has only been in place for nine years," she said.
Wang Jun, a 35-year-old Beijing resident, urged raising the
exemption level even higher. "Tax should target people with high
income, not those whose income meets basic living requirements. I
mean, the 1,000-odd yuan per month incomes you find in large cities
like Beijing."
But some experts who asked not to be named said further taxation
reform must be determined by the central government, as any such
changes must take State finance into account.
The new change in Beijing affects local residents, and does not
apply to foreigners working and living in Beijing.
(China Daily September 27, 2003)