The Tax Rate Setting Is Outdated, And The Call For Individual Income Tax Reduction Is Revived

It has been more than 6 years since the last adjustment of individual income tax rate on wages and salaries (hereinafter referred to as "individual income tax on wages"). With the increase of residents' income, prices, especially housing prices, the current rate and grade of individual income tax on wages and salaries are no longer reasonable, and the call for reducing tax burden is increasingly strong. However, a new round of individual income tax system reform plan combining comprehensive and classified reform is still under design, and there is no timetable for its implementation.

stay Individual income tax reform Under the contradiction between the difficulty in implementing the overall plan in the short term and the public's appeal to reduce the individual income tax burden as soon as possible, an optional plan was proposed by officials and scholars including Huang Qifan, vice chairman of the Finance and Economic Commission of the National People's Congress: reduce the rate of individual income tax on wages first, adjust the tax rate level reasonably, and use this as a breakthrough to promote the reform of combining comprehensive and classified individual income tax.

At present, the maximum marginal tax rate of 45% of payroll and individual income tax can be reduced moderately, and the tax rate gap for low and medium income should be widened and the tax rate should be reduced moderately. The adjustment of wage and personal tax rates and ranks should take into account the fiscal revenue and reduce the tax burden of low - and middle-income people to better play the role of income regulation.

　　 The tax rate of middle-income people is too high

The individual income tax system in China is classified into 11 categories, including income from wages, remuneration for labor services, income from production and operation of individual businesses, income from property transfer, etc.

The income tax, which is most concerned by the people, adopts the progressive tax rate of excess. In order to reduce the tax burden of middle and low wage earners and increase the regulation of high-income earners, in September 2011, the State Council raised the threshold of individual income tax on wages to 3500 yuan, reducing the previous 9-level tax rate to 7 levels, with the tax rate ranging from 3% to 45%.

Huang Qifan said during the review of the financial budget report at this year's two sessions of the National People's Congress and the National People's Congress that although there have been improvement measures such as raising the threshold and adjusting the tax rate gap in recent years, they have not adapted to the new situation such as the improvement of the current level of economic development and changes in the way of residents' income. According to the data of the National Bureau of Statistics, the per capita disposable income of urban residents was 21810 yuan in 2011, and 33616 yuan in 2016, an increase of about 54% compared with 2011.

Yang Zhiyong, director of the Finance and Taxation Research Center of the Chinese Academy of Social Sciences, told China Business News that at present, China's wage tax rate is too high and the tax rate is narrow, which is not conducive to attracting high-end talents and cultivating the middle class. This problem has become more prominent and needs to be adjusted as soon as possible.

"For example, after deducting 3500 yuan and three insurance and one fund related expenses from your salary, the tax rate will jump from 10% to 20% for the part exceeding 4500 yuan to 9000 yuan, and from 9000 yuan to The tax rate of 35000 yuan will be increased to 25%. The gap between tax rates is too narrow, and the tax rate increases a little bit, which is not conducive to the cultivation of the middle class. " Zhang Jianjing, PwC China's individual tax consulting partner, told reporters.

Shanghai Family financial institution An ordinary employee who earned more than 9000 yuan per month after tax and paid more than 1000 yuan of individual income tax. He told China Business News that the rent in Shanghai accounts for one third of the salary. He can hardly save money, let alone hope to buy a house. At present, the tax rate of 20% is too high for the 4500-9000 yuan part.

The current excessive progressive classification of individual income tax is not conducive to the formation of the middle class. With the increase of personal income in recent years, 15% was cancelled in 2011 The tax rate of the part of taxable income exceeding 4500 yuan jumped from 10% to 20%, which led to a significant increase in the tax burden of middle-income people. Now the country proposes to expand the proportion of middle-income people, which should Consider adjusting the personal tax rate.

At present, China's individual income tax is mainly based on payroll tax, and the middle and high income wage earners make a greater contribution.

　　 High tax rate Not conducive to talent gathering

The current individual income tax on wages is not only bad for cultivating the middle class, but also the marginal tax rate of up to 45% is too high (the monthly taxable income is more than 80000 yuan), which is bad for attracting high-end talents to pay taxes in China (the mainland), and to a certain extent, it has curbed consumption. The real rich avoid the high tax rate through many tax avoidance means, making it difficult to "raise" the individual income tax.

Huang Qifan said that at present, the most prominent problem of personal income tax is the maximum marginal tax rate of 45% for wage income. Compared with neighboring countries, Hong Kong, China, only 15%, Singapore, 22%; Compared with developing countries, Russia Only 13% in Ross and 27.5% in Brazil; Compared with developed countries, Canada is 33% and the United States is 39.6%. In these countries or regions, there are many pre tax deduction projects, such as investment in house purchase, mortgage interest, children's education About half of the expenses, medical treatment, support and other major items can be deducted.

Huang Qifan said that more than half of the income of many multinational companies in the Asia Pacific region comes from China, but most of their Asia Pacific headquarters are located in Hong Kong and Singapore, China. One of the main reasons is that China's personal income tax rate is too high, more than twice that of neighboring countries or regions, and there is no reasonable tax rebate policy. At present, the highest 45% tax rate of income tax on wages is far higher than the 20% tax rate on capital income, which also causes dissatisfaction among wage earners.

Fan Yong, vice president of the School of Taxation of the Central University of Finance and Economics, told the reporter that at the beginning of the design of the individual income tax system, China lacked capital, so at that time, capital was lightly taxed and labor was heavily taxed. Now the objective conditions have changed. We should encourage more labor income, strengthen capital taxation, and balance the tax burden of labor income and capital income.

Huang Qifan said that the working class, especially the professional and technical talents, has become the main force of individual income tax due to the single source of income and the tax withheld and remitted by the unit. This proportion has risen to about 70% About 70% come from 10% of the high-income people. In contrast, China's high-income groups have strong tax avoidance motivation and many ways. Therefore, the high tax rate has not brought us corresponding high taxes.

Of course, putting domestic income overseas does not mean that individual income tax will not be paid. Zhang Jianjing said that the Chinese government has signed the Standard for Automatic Exchange of Tax Related Information in Financial Accounts (CRS), which will exchange tax related information in financial accounts with other countries. In the future, individual overseas income will be mastered by domestic tax authorities. This is to combat the use of cross-border financial accounts to evade taxes.

　　 Decrease Salary tax rate Different suggestions

A certain consensus has been reached on the adjustment of the current payroll and individual income tax rate and rank distance, that is, the maximum marginal tax rate of 45% should be reduced, the rank distance of tax rate should be reduced, and the range of rank distance should be expanded. There are different opinions on how to adjust it. Huang Qifan suggested that, first of all, the highest rate of wage income tax in personal income tax should be lowered from 45% to 25%, as a breakthrough to promote the reform of combining comprehensive and classified personal income tax.

Yang Zhiyong told the reporter that considering that the highest individual income tax rate in neighboring countries and regions is lower, and is relative to the corporate income tax burden (25%), the highest marginal tax rate of China's individual income tax rate can be considered to be set at 25%。 He suggested that the current salary and individual income tax level 7 could be reduced to level 6, and the tax rate of 3% should be applied to the monthly taxable income below 5000 yuan; The tax rate of 5% applies to RMB 50 million to RMB 1 million; Applicable to 10000~50000 yuan 10% tax rate; 15% tax rate is applicable to RMB 50000~100000; 20% tax rate is applicable to RMB 100000~RMB 200000; The tax rate of 25% is applicable to those above 200000 yuan.

Fan Yong told the reporter that before reducing the wage tax rate and grade gap, we should consider what level the proportion of individual income tax in the overall income should be kept. If the proportion of direct taxes (such as individual income tax) is increased according to this round of tax system reform The general direction of low proportion of indirect tax. After the adjustment of individual tax rate and rank gap, if the individual tax income drops significantly, it is obviously not in line with the reform direction. Therefore, in actual operation, it is also necessary to reasonably define the tax rate and level of gap according to the big data of individual income tax.

Fan Yong believes that it is simple to significantly reduce the income tax rate, but the role and effect of income adjustment are not accurate. Through the introduction of special individual tax deduction methods such as housing loan interest and education expenditure, it is closely linked to the personal burden, and the tax reduction effect is better.

For more information, please pay attention to the World Clothing, Shoes and Hats Internet Cafe.