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Xie Xuren, director of the State
Administration of Taxation, gives a press conference in the State Council
Information Office, Beijing, Jan. 24, 2007. (Xinhua Photo)
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Beijing,
Jan. 24 (Xinhua) -- The Chinese government will reduce taxes for low-income
groups and tighten controls on tax evasion by high earners to ensure fairness
and social justice and to close the wealth gap, said State Administration of
Taxation commissioner Xie Xuren on Wednesday.
Although the threshold for personal income tax was
raised from 800 yuan to 1,600 yuan per month from Jan. 1 last year, revenue from
personal income tax revenue climbed 17.1 percent year-on-year to hit a record
245.23 billion yuan last year.
The growth rate is 11.8 percentage points higher than
the previous year.
Xie attributed the rapid growth to the rising incomes
fueled by the booming national economy and tighter enforcement of collection
rules.
He said the SAT would make full use of tax leverages
to narrow the widening gap between the rich and poor and contribute more to
China's social harmony and common prosperity.
Tax revenue from medium and low income earners grew
by 8.4 percent last year while the collection from high income earners surged
33.9 percent.
Xie outlined the measures the SAT had taken in
facilitating "fair taxation" last year, citing the regulation on taxing home
sales.
Under the regulation, people who purchase expensive
homes such as villas and townhouses and sell them more than five years after the
purchase must pay tax on the income while those who buy affordable apartments
are exempted.
The levy of consumption tax on luxury goods was
another method of fair taxation.
China began to levy higher customs duties on luxury
items brought by travelers or mailed to China from Jan. 1 this year, with the
rate on golf clubs and expensive watches tripling to 30 percent and that on
cosmetics jumping from 20 to 50 percent.
The move accorded with the levy of consumption tax on
luxury goods such as luxury watches, golf clubs, yachts, and wooden floor panels
since April last year.
"Taxation is a major revenue redistribution tool. One
of our top priorities this year is to use tax policies to guide consumption,
facilitate energy conservation and environmental protection and to uphold
fairness and social justice," Xie said.
Related:
Tax authorities waiting for better response to new tax return system
BEIJING, Jan. 24 (Xinhua) -- China's tax authorities on Wednesday said they were waiting for improvements in the response to the country's new self-declaration system under which only two percent of high-earning Beijing residents have reported their 2006 earnings to date.
The new system requires those who earned more than 120,000 yuan(15,400 U.S. dollars) last year to report their earnings to tax authorities in the first three months of 2007.
It is estimated that 300,000 to 350,000 people earn more than 120,000 yuan per year in Beijing.
China's taxation authorities promise to well advance corporate income tax reform
BEIJING, Jan. 24 (Xinhua) -- The Chinese State Administration of Taxation (SAT) Wednesday said it would take effective steps to "secure a smooth corporate income tax reform".
China's top legislature is going to discuss and review in March the reform aiming to adopt uniform corporate income tax rates for both domestic and foreign companies.
China currently adopts dual income-tax structures, under which domestic companies pay income tax at a nominal rate of 33 percent, while their foreign counterparts -- who benefit from tax waivers and incentives to encourage investment in China -- pay an average of 15 percent.
