Wen Jiabao: China Will Raise The Threshold Of Personal Income Tax.

Yesterday, Premier Wen Jiabao went to the Chinese government network and Xinhua network to communicate with netizens online. He said he would raise the deduction standard of personal income tax expenses. At present, this matter has been listed on the agenda of the State Council and will be discussed on Wednesday.

"This is the first thing we have done for the common people this year."

China's personal income tax exemption has undergone several reforms.

Since the implementation of personal income tax in 1980, the amount of exemption has been set at 800 yuan.

After nearly 30 years of development, with the improvement of residents' living standard and the increase of income, the exemption amount increased from 800 yuan to 1600 yuan in 2006.

From 2008 onwards, the amount of exemption increased from 1600 yuan to 2000 yuan to meet the needs of the economic situation at that time.

The market expects the personal income tax exemption will increase by 500 yuan, that is, from the current 2000 yuan to 2500 yuan.

In fact, experts and scholars have a lot of controversy over the scope of the exemptions.

However, it is necessary to set up the basic standard to allow more people to benefit.

Yang Zhiyong, a researcher with the Institute of Finance and trade of the Chinese Academy of Social Sciences, believes that according to the current situation, the exemption of personal income tax can be raised to 2500 yuan.

Taking the average wage of husband and wife two people for 5000 yuan / month as an example, according to the current levy method, the family member's personal income tax assessment salary is 5000 yuan, minus 20% of the three dangerous and one gold, that is 4000 yuan / month, and the 2000 yuan exemption part, the husband and wife need to pay each individual income tax calculation method is: 5005% 1500 10%=175 yuan.

If the tax exemption is increased to 2500 yuan, the remaining 1500 yuan tax rate is 5005% 1000 10%=125 yuan under the premise that the tax rate remains unchanged.

Contrast shows that after the increase of 500 yuan, the monthly household income increased by 100 yuan, and the annual household income increased by 1200 yuan.

"After the increase of the exemption rate, more low-income groups will be included in the scope of tax exemption, which is more conducive to the fairness of the tax burden."

Yang Zhiyong analysis shows that directly increasing the exemption amount can certainly improve people's livelihood, but more importantly, the exemption amount should indeed be related to residents.

It is worth mentioning that some experts have analyzed that it is not the only way to reform the personal income tax and increase the exemption amount.