Personal income taxation
should include gray income, said a signed article in International Securities
News. An excerpt follows:
This is the first year the State Administration of Taxation (SAT) has
required high-income earners, who earn more than 120,000 yuan (US$15,400) a
year, to declare their annual income. The deadline was April 2.
Judging from the results, only a small proportion of top earners have filed
personal income tax statements, with wage earners accounting for the majority.
Private business owners, freelancers and those in high-income trades were not
active in filing statements.
WaWage earners have long been the main force in personal income taxation. For
example, salaried workers contributed nearly 75 percent of personal income tax
in Nanjing, Jiangsu Province. This is because most workers' salaries are paid
directly into their bank accounts, which are monitored by the taxation
But the incomes of top earners are not that transparent. There is a large
proportion of gray income. The government should improve its collection of taxes
from top earners.
Personal income tax is an important source of fiscal revenues and also a
major means to adjust income distribution. No one would normally file gray
income. But the core of the income gap lies in this.
To take a laissez-faire attitude towards such grey income will make the
introduction of these statements futile.