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News >Bizchina

60m free from personal income tax

2011-08-31 14:46

A new personal income tax law of China will be implemented from Sept 1, exempting 60 million people from paying personal income tax from that date onwards, china.com.cn reported Wednesday.

According to the new law, people with monthly personal incomes under 3,500 yuan ($541) after pension, medical and unemployment insurances and housing fund are deducted will no longer need to pay personal income tax.

The adjustment will cut the number of taxpayers from 84 million to 24 million, 28 percent to below 8 percent of total wage earners.

Experts said that the new law will mainly benefit middle- and low-income earners. These income groups have a higher marginal propensity to consume so the tax reduction will stimulate domestic demand and boost economic growth.

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