Experts suggest raising the threshold for personal income tax to 8,000 yuan

According to news on September 28, Sheng Songcheng, a professor at China Europe International Business School and former director of the Survey and Statistics Department of the People's Bank of China, publicly stated today that he proposed to increase the personal tax threshold to 8,000 yuan. Sheng Songcheng suggested that, first, increase the personal tax threshold to 8,000 yuan/month. According to its calculations, tax revenue will decrease by about 30 billion yuan every year, which is only 0.17% of the total tax revenue in 2023.

Second, the tax rate for low- and middle-income people will be lowered. The individual tax rate will be reduced by 5 percentage points for annual incomes of 100,000 to 350,000 yuan. Currently, individual income taxes for annual incomes of 100,000 to 200,000 yuan and 200,000 to 350,000 yuan are progressively levied at tax rates of 10% and 20% respectively. It is recommended that the individual tax rates be reduced to 5% and 15% respectively.

According to its calculations, this policy will reduce tax revenue by no more than 100 billion yuan per year.

Yao Yang, Distinguished Professor of Boya at Peking University and Professor of Economics at the National Development Institute, once said that whether the threshold for personal income tax can be raised to 8,000 or 10,000 is the thinking of people who "why not eat minced meat".

Regarding the complaints from the outside world, Yao Yang has now further explained that the proportion of China's population paying personal income tax is less than 20%, and the current progressive personal income tax rate is too high, especially the middle-income group with an annual income of 30,000 to 400,000 yuan.

"There are very few people in China whose monthly income exceeds RMB 10,000," Yao Yang said.

Therefore, Yao Yangcai bluntly stated that he did not agree with further raising the threshold for personal income tax, believing that this would reduce the number of tax payers. Instead, the progressive tax rate should be adjusted to reduce the tax burden on middle-income earners.