No hasty tax reforms

Every year during the annual sessions of the country's top legislature and the political consultative body, proposals pertaining to individual income tax receive widespread attention; this year has been no exception.

A deputy to the National People's Congress, for instance, proposed that the tax exemption threshold should be raised from the 3,500 yuan ($572) at present to between 6,000 to 7,000 yuan. Another member of the National Committee of the Chinese People's Political Consultative Conference has argued that the threshold should be 30,000 yuan when inflation is taken into account.

There have also been proposals for lowering the country's top tax rate of 45 percent on the grounds that it has driven many business owners to reject or accept only a symbolic amount of salary to evade tax. Meanwhile some corporate executives working with foreign-funded companies in the Chinese mainland have their paychecks issued in such regions as Hong Kong and Singapore where the top tax rate on personal income is 20 percent or less, which results in them making a significantly smaller contribution to the national coffers.