BEIJING — China’s new tax and fee cuts will boost the real economy through reducing corporate burdens and creating a stable and fair business environment, experts told the Xinhua-run Economic Information Daily.
Starting from Oct 1, the minimum threshold for personal income tax will be raised from 3,500 yuan (about 510) to 5,000 yuan per month, or 60,000 yuan per year.
Those whose monthly salaries range from 5,000 yuan to 20,000 yuan will see their tax get cut by over 50 percent and those whose monthly salaries range from 20,000 yuan to 80,000 yuan will see their tax get cut by 10 to 50 percent.
Individual income tax was the third biggest contributor to China’s total tax revenue, following value-added tax and enterprise income tax. Last year, China collected individual income tax worth nearly 1.2 trillion yuan, about 8.3 percent of the country’s total tax revenue.
Last month, a State Council executive meeting chaired by Premier Li Keqiang saw the unveiling of new tax cut measures aimed at boosting the real economy while working to ensure the full implementation of all existing tax reduction measures.
All tax cut incentives decided at the meeting were expected to cut corporate tax burdens by more than 45 billion yuan this year.
Analysts agree that tax reduction has played a significant role in further boosting market vitality and driving industrial development.
“These tax cut measures will help create a stable, fair and transparent business environment, inject vitality into market entities, and allow more people to enjoy bonuses of the reform,” said Professor Xu Zhengzhong with the Party School of the Communist Party of China (CPC) Central Committee.
Zhang Lianqi from Ruihua Certified Public Accountants said that China’s tax reform is conducive to the transformation and upgrading of the real economy and the stabilization of economic growth.