Tax reform an index of social equity

The draft amendment to the Individual Income Tax Law submitted to the Standing Committee of the National People's Congress on June 19 for review is a welcome move, especially because it has been seven years since the personal income tax threshold was raised from 2,000 yuan ($309) to 3,500 yuan.

The tax reform has drawn wide public attention because it is expected to not only ease the tax burden on low- and lower-middle income families, but also help establish a modern fiscal system.

It is necessary to reform the personal income tax system because it has some inherent loopholes. For example, it is unfair to impose different tax rates on the same amount of income because of the different sources of income or the nature of individuals' employment. The draft amendment makes it easy to collect tax on all personal income, including salary, remuneration and royalty, in order to plug the loopholes.