Government and Policy
Chinese Premier Wen chats online with Internet users
(Xinhua)
Updated: 2011-02-27 09:51
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Cabinet to discuss raising threshold of personal income tax
Chinese Premier Wen Jiabao said Sunday that the State Council, the Cabinet, would discuss on Wednesday a plan to raise the threshold of personal income tax.
The plan, if implemented, would benefit middle and low-income groups, Wen said in answer to a question on taxes during an on-line chat with the public.
The plan would be delivered to the National People's Congress, the country's top legislature, for review, he said, without specifying when the plan would come into effect.
Currently, China's income tax threshold stands at a monthly income of 2,000 yuan ($303).
Analysts have been calling for a rise in the threshold, which they believe could help relieve the economic burden of middle and low-income earners as consumer prices continue to rise.
China's consumer price index (CPI), a major gauge of inflation, rose 4.9 percent in January from a year earlier as food prices increased 10.3 percent due to rising demand and a drought in key grain-growing regions. The CPI rose 4.6 percent in December and 5.1 percent in November, a 28-month high.
The government raised the threshold for individual income tax from 1,600 yuan to 2,000 yuan in March 2008.