An upcoming tax overhaul is expected to lift China’s personal income tax threshold by around 43% to 5,000 yuan per month from 3,500 yuan per month, according to state media.
A draft amendment to the Individual Income Tax Law, which details the threshold increase, has been submitted for consideration at a meeting of the Standing Committee of the National People’s Congress, the country’s legislature.
Besides the threshold increase, under the draft amendment incomes from wages and salaries, labor service payments, author remuneration and royalties would all be subject to an integrated tax for the first time.
Special tax deductions for spending on children’s education, continuing education, medical expenses for major illnesses, interest payments on mortgages, and housing rent would also be increased for the first time. The amendment would also adjust the tax rate structure and increase the number of low-tax rate brackets.
This would be the seventh time the tax code has been overhauled since its introduction in 1980.