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Rise in income tax exemption threshold ruled out by official [Copy link] 中文

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Post time 2016-3-8 12:53:46 |Display all floors
Finance Minister Lou Jiwei ruled out on Monday the possibility of raising the monthly income tax exemption threshold.
He said the government instead is considering adopting various exemption standards based on individual financial burdens.
Lou made the remarks at the annual legislative session when answering a question on whether the monthly tax exemption threshold should be raised to 5,000 yuan ( ...

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Post time 2016-3-8 12:53:47 |Display all floors
Tax codes should not be too complicated, especially for a developing country like China. My favor is the 9-9-9+ tax code i.e. 9% VAT (or straight sales tax), 9% corporate profits tax and 9% individual tax +. The plus + for individual tax means and includes a payroll deduction for social security and medicare insurance and a simple household head count deduction and credit. For example, after the payroll deductions, the total household head count x a waiver amount will be deducted and the result will be taxed at 9% and if the result is in the negative, then a credit will be given (by the government). An illustration: $3000 income - $300 payroll - $1500 (3 persons in the household x $500 waiver) = $1200 which will be taxed at 9%. If the household count is 6, then the final taxable amount will be -$300, in which case the government will give a credit instead. The payroll and waiver can be adjusted from time to time. This is a very simple system and very easy for anyone to calculate. It is much better than other systems that involves mortgage, medical and other types of deductions etc. We certainly don't want to end up in a complicated tax code like that in the USA, which nobody can understand and cost the government a lot to execute and administer !

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