Individual income tax threshold must be raised first to propel overall reform

THE STANDING COMMITTEE of the National People's Congress, China's top legislature, recently reviewed this year's budget enforcement report by the State Council, the country's Cabinet, which says individual income tax grew 18.5 percent from January to July compared with 10 percent growth in people's incomes. Beijing News comments:

The report shows people's incomes grew in the first seven months of this year, but as the individual income tax threshold has remained 3,500 yuan ($534) a month since 2011, they had to pay a higher percentage of their incomes as tax. In fact, many low-and middle-income people have to pay a large part of them incomes as individual income tax.

The case highlights the necessity to expedite the personal income tax reform.