With new tax brackets, some Chinese saw higher paychecks in October

World
Europe

Chinese people saw a little more money on their October paychecks, after new tax brackets came into affect on October 1, according to the State Administration of Taxation (SAT).

The income tax reduction amounts to 31.6 billion yuan (4.54 billion U.S. dollars) in total while more than 60 million people have been completely exempt from the individual income tax, SAT statistics showed.

Taxpayers in the manufacturing sector benefited the most after the minimum threshold for personal income tax was raised from 3,500 yuan (503 U.S. dollars) to 5,000 yuan (718.5 U.S. dollars) per month starting October.

Their aggregate income tax payment dropped 5.85 billion yuan (840 million U.S. dollars), accounting for 19.3 percent of the total reduction for October payrolls.

Employees in the equipment manufacturing industry posted an aggregate income tax cut of 3.43 billion yuan (490 million U.S. dollars), which accounts for 58.7 percent of the total reduction for manufacturing employees.

Private enterprises also saw noticeable cuts in income taxes, with their employees paying 16.45 billion yuan (2.36 billion U.S. dollars) less.

Analysts say these changes conform to the objectives of the income tax reform which are to facilitate social justice and increase the growing vitality of the Chinese economy.

Luo Tianshu, director of the Income Tax Bureau of the SAT, said taxpayers who earned less than 20,000 yuan (2874 U.S. dollars) in October found their income tax expenses more than halved. Their aggregate income tax expenses were 22.4 billion yuan less.

Li Wanfu, director of Taxation Science Research Institute, said the income tax cuts were substantial for private businesses, which would give a boost to them and enhance their competitiveness.

Source(s): Xinhua News Agency