China is considering a largescale cut among low-and-middle income earners. The Standing Committee of National People's Congress, the country's top legislature, opened its bi-monthly session in Beijing on Wednesday. On the agenda of the three-day session is the draft amendment to the individual income tax law.

The draft amendments propose to raise the individual income tax threshold on wage earners from the current two thousand yuan per month to three thousand. The legislation also proposes to slash the number of tax brackets from nine to seven so that the group of taxpayers subject to low tax rates will be expanded. It's estimated that about 95 percent of income taxpayers will benefit from the adjustments. And 88 percent of wage earners will not have to pay any personal income tax after the change.

Chinese Finance Minister Xie Xuren said, "For the purpose of strengthening the function of individual income tax in adjusting residents income distribution, reduce the tax burden of low-and-middle income group, as well as step up adjustment on high-income earners, we believe it's necessary to amend the individual income tax law to further raise the tax threshold, and at the same time adjust the tax brackets for on salary income, income of private businessmen and contracting as well as leasing income. We have taken into account the actual increase of basic living expenditure in setting the threshold."

The level of tax exemption threshold has been a focal point in this round of amendments. Many taxpayers say they welcome the move. But they think the hike is still not enough.

"It's good news for me. I will pay less tax after the boost."

"I think the 3000-yuan threshold is still relatively low. I think the level should be raised to 45 hundred yuan at least. Prices have been rising fast, the government should take more care of the low-and-middle income group."

This is the third boost to the tax threshold since the passing of the individual income tax law in 1994. Tax officials estimate the adjustments could cost the government 120 billion yuan in tax revenue, the most compared with previous moves.

CCTV reporter Liu Ying said, "Finance ministry officials say the 3000-yuan individual income tax threshold is based on the principle that basic living expenses are not subject to tax. They say the amount has taken into account the potential rises over the next few years. But they also stressed there will be more adjustments in the future should circumstances change. This allows flexibility for whatever may come."