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Further tax reform needed for income redistribution

Xinhua | Updated: 2013-02-19 17:04

BEIJING - China will actively explore tax reforms related to personal income, property and social security in order to adjust the way income is allocated, said a senior official from the Ministry of Finance.

The government must actively study taxes as a means of redistributing income, as the country's widening income gap has seen no fundamental changes, said Jia Chen, head of the ministry's department of tax policies.

Jia said the government has to improve the personal income tax system, particularly by increasing taxes on the wealthy. He also said appropriate adjustments will be made regarding which items will feature consumption taxes and how much those taxes will be.

Property taxes for residential housing will be gradually expanded from the cities of Shanghai and Chongqing to other Chinese cities, Jia said, adding that China will also strengthen property tax reforms related to enterprise-owned property.

Jia also proposed levying social security taxes in order to establish a sound mechanism for funding social security.

The government unveiled guidelines to reform its income distribution mechanism in early February amid growing public concern over the widening wealth gap.

The document offers directions on an extensive range of policy areas, such as taxation, subsidies, the salary system, financial regulation, household registration and social security, in order to realize the goal of fairer income distribution.

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