BEIJING -- China is to raise its monthly individual income tax levy threshold from 1,600 yuan (US$217.69) to 2,000 yuan (US$272.11), according to the draft amendment to the law on individual income tax.
The draft amendment was on Sunday submitted to the Standing Committee of the National People's Congress (NPC), China's top legislature, for deliberation.
Xie Xuren, Minister of Finance told the legislative session that "raising the threshold of individual income tax collection from 1,600 yuan to 2,000 yuan means a reduction of 30 billion yuan in State revenue."
However, the raise of personal income tax collection threshold will free 70 percent of income earners from paying income tax, while the current threshold of 1,600 yuan only makes 50 percent of income earners free from paying the tax.
Xie said "the increase of individual income tax collection threshold is within the country's financial bearing capacity and aims to relieve the economic burden of medium and low income earners."