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The right tax threshold
(China Daily)
Updated: 2008-12-02 07:47 The disputes on the threshold of individual income tax are largely due to the income gap between different regions, says an article in Changjiang Daily. The following is an excerpt: Many disputes are centered on the individual tax threshold now. As economist Mao Yushi believed, China took 800 yuan as the threshold of paying individual taxes, because Chinese usually had monthly salaries of less than 100 yuan at that time. Now the income of Chinese people has been greatly increased, so the threshold should be raised to 8,000 yuan. Many people show their support to Mao's view. However, setting the threshold between 3,000 and 3,500 yuan seems more appropriate because most Chinese can now earn monthly salaries of less than 3,500 yuan and this threshold will benefit nearly all Chinese. If China takes Mao's suggested standard, quite a number of the Chinese will not need to pay this tax even though they have earned monthly salaries of 5 to 8 times of the national average - that is a little more than 1,000 yuan. Mao's standard will not help narrow income gaps and will further widen the gap between different regions. (China Daily 12/02/2008 page8) |