Premier Li Keqiang pressed for all-around implementation of policies regarding specific deductions on individual income tax while presiding over an executive meeting of the State Council.
It is an unprecedented and historic taxation reform to carry out the revised Individual Income Tax Law and establish a comprehensive and clearly categorized system in this field, the Premier said.
The specific deduction ranges and standards, Premier Li added, should bring benefits to a broader community as much as possible.
A number of decisions were made at the meeting. All departments concerned should ensure that the minimum deduction threshold for individual income tax rises from 3,500 yuan ($512.40) to 5,000 yuan as of Oct 1.
And clear demarcations should be made on specific deduction ranges and standards for children’s education, continuing education, healthcare for serious diseases, interest on regular housing loans, housing rent and expenditures to support senior citizens.
In addition, a public inquiry will be conducted on specific deduction ranges and standards. Thereafter, they will be legally carried out as of Jan 1, 2019.
“The deduction range and methods should be exercisable, the deduction plan should be dynamically changed with social development and people’s living standards, and taxable incomes shall be way higher than 5,000 yuan to reduce people’s burdens and raise their consumption ability,” Premier Li stressed.
According to the Premier, the pension fund is sufficient and well-balanced across the nation, and local authorities should keep existing collection policies unchanged before reform, and step up research to lower premium rates for social insurance.
He said taxes are an important lever in the market economy, concerning enterprises, people’s lives, and the overall social and economic development.
In the face of complicated domestic and international economic situations, more measures to reduce fees and taxes should be implemented to send positive signals to society, Premier Li said.
“These measures are important steps to lower enterprises’ burdens, and raise the economic competitiveness of the nation,” he said, adding that the government should cut corners for the benefits of enterprises and the people.