Dec 03, 2018 (China Knowledge) - The recent data released by the State Administration of Taxation shows that in the first month of the implementation of personal income tax reform, the national personal income tax was reduced by RMB 31.6 billion. More than 60 million taxpayers no longer pay personal income tax on salaries. The income from wages and salaries issued in October and the income from production and operation obtained by individual business households have been declared.
The data shows that in the first month of the reform, the tax reduction of salary income was RMB 30.411 billion, with a tax reduction rate of 41.3%. "This personal income tax reform has optimized the tax rate structure, greatly widened the gap between the middle and low tax rates, and the reform dividend benefits the middle- and low-income groups," said Luo Tianshu, director of the income tax department of the state administration of taxation. He, further, said that taxpayers who received salaries less than RMB 20,000 in October had tax reductions of more than 50%. The amount of tax reductions amounted to RMB 22.4 billion, accounting for 70.9% of the total amount of tax reductions in that month.
Among the industries with general tax cuts, manufacturing taxpayers have the largest tax cuts, and private enterprises have the most obvious tax cuts. Fiscal and tax experts say that this reflects the original intention and significance of tax reform, which not only promotes social equity, but also increases the endogenous power of economic growth.
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