Fix the tax on bonuses

THE DOCUMENT CONCERNING A CHANGE TO the method of taxing year-end bonuses, which the State Administration of Taxation (SAT) now claims to be fake, is, to say the least, an embarrassment to the administration.

The document carried by major papers and even Xinhua News Agency and People's Daily outlined a more reasonable format to tax on year-end bonuses than the current method, whereby a person who gets a year-end bonus of 6,000 yuan ($940) will pocket 5,700 yuan after tax is deducted, but will only get 5,425 yuan after tax if his bonus is 6,001 yuan.

Such abnormal cases often happen when year-end bonuses fall within close range of the thresholds at which tax rates increase on personal income.