China considers reform on individual income tax

BEIJING -- The Chinese government is considering reform of the individual income tax system this year, finance minister Lou Jiwei said Sunday.

China grossed 443 billion yuan ($71 billion) in 2014 from individual income tax, 3.2 percent above the budgetary expectation, Lou said when briefing lawmakers the final accounts for 2014.

He attributed the overrun of individual tax to quicker growth of urban incomes than expected.

The public have high hopes for reform of the current system, especially on the tax exemption threshold of 3,500 yuan ($564) per capita per month. Some people have argued that the threshold should be lifted to 10,000 yuan to distribute wealth more fairly.

Lou said reform of income tax is not just about thresholds, but must consider overall income and spending, such as costs of mortgage.

Of China's 18 current taxes, only three -- individual income tax, corporate income tax, and vehicle and vessel tax -- are levied through legislation, while the rest are imposed through formal or provisional regulations by the State Council.