60 Million People In The Mainland Will Be Exempted From Individual Income Tax From September 1

From September 1, the revised Individual Income Tax Law of the People's Republic of China will be fully implemented. After the implementation of the new tax law, salaried workers with monthly income less than 3500 yuan (after deduction of "three insurances and one pension") will no longer pay personal income tax The proportion of wage earners in the total wage earners will drop from 28% to below 8%, which will sharply reduce the number of individual income tax payers from about 84 million to about 24 million. Experts pointed out that from the perspective of China's current personal tax reduction, the main beneficiaries are low - and middle-income people. The marginal propensity to consume of low - and middle-income people is high. Therefore, tax reduction will play a positive role in promoting China's economic growth to a certain extent, especially when China is in urgent need of stimulating domestic demand.

Most of the monthly income of 4000 yuan is exempted

It is understood that since 1994, the Individual Income Tax Law has undergone five revisions, and this is the fifth reform. The experts stressed that the biggest change for ordinary workers in the implementation of the revised Individual Income Tax Law of the People's Republic of China is that the standard of individual income tax deduction for wages and salaries has been raised from 2000 yuan to 3500 yuan per month. 3500 yuan refers to the paid salary after deduction of "three insurances and one fund". In fact, most employees whose salary income is about 4000 yuan can be exempted from personal income tax.

The relevant person in charge of the State Administration of Taxation recently said that the income from wages and salaries actually obtained by taxpayers after September 1, 2011 (including September 1, 2011) should be calculated and paid for individual income tax according to the expense deduction standard and tax rate table revised by the tax law. For the income from wages and salaries actually obtained by the taxpayer before September 1, 2011, whether or not the tax is declared by the withholding agent after September 1, 2011, the deduction standard and tax rate table before the amendment of the tax law shall be applied to calculate and pay individual income tax.

Tax cuts will not lead to price rise

As for the impact of the implementation of the new Individual Income Tax Law, Professor Chen Gong, the head of the Department of Finance of Xiamen University, said in an interview with our reporter: "First of all, for the country, it is the reduction of tax revenue. According to the prediction of the Tax Administration Department of the Ministry of Finance, the adjustment of the exemption amount of individual income tax will reduce the annual tax revenue of the government by about 160 billion yuan. Secondly, for taxpayers, especially those with medium and low incomes, the personal income tax burden is reduced. The beneficiaries of this reform of individual income tax are mainly those whose monthly salary is between 4000 and 8000 yuan. "

He also believes that since the individual income tax is directly withheld every month and settled at the end of the year, the amount of tax reduction is large in terms of the whole country, but in terms of everyone, it ranges from tens to thousands of yuan, so it will not have a great impact on people's consumption demand, and the tax reduction of individual income tax will not lead to price increases.

The insiders also pointed out that in addition to the adjustment of individual income tax, people should also pay attention to another important tax reduction content, that is, the adjustment of tax rates for income from production and operation of individual businesses and income from contracted and leased operations. The relevant person in charge of the State Administration of Taxation said that the relevant tax laws and regulations on income items from production and operation of individual businesses are not only applicable to individual Industrial and commercial households also apply to the income from production and operation of individual proprietorship enterprises and partnerships.

Individual income tax has the function of adjusting income, but some experts said that individual income tax cannot be added to all the functions of income redistribution, and individual income tax cannot bear so many heavy responsibilities. This adjustment of individual income tax is only a step of tax reform, and cannot be expected to be completed in one step.

Promoting economic growth

No matter whether there is any imperfection in the reform of individual income tax, there is no doubt that the promotion of individual income tax reform has brought real benefits to low - and middle-income people. Taking Beijing as an example, Hao Shuobo, deputy director and spokesman of Beijing Local Taxation Bureau, told reporters that the implementation of the revised Individual Income Tax Law would benefit 4.7 million taxpayers in Beijing, including 300000 individual businesses. The tax payment of the working class will be reduced from the current 57% to 28%. There are about 2.29 million taxpayers who do not need to pay personal income tax. In addition, some high-income people will increase their tax burden.

Dong Zhengwei, a lawyer who once proposed to raise the threshold of individual income tax, said that raising the threshold of individual income tax does not mean that the national fiscal and tax revenue will inevitably decrease. The increased income of ordinary citizens will inevitably be transformed into social consumption and new taxes in the transaction of goods and services, which is conducive to the development of economic society.

Chen Gong believes that personal income tax is levied on personal income, and its main role is to raise financial income and adjust income redistribution to achieve social fairness. It is not directly levied on production or circulation links, so its impact on the economic trend is not direct. However, the reduction of individual tax will increase the income that belongs to individuals, which in turn will increase consumption demand, thus promoting economic growth.

He also believes that it is not enough to rely solely on individual income tax reduction to drive the obvious growth of domestic demand, and the role of individual income tax is still limited. It is impossible to drive the rapid growth of domestic demand through individual tax reduction.
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