China Party for Public Interest Proposes Personal Income Tax Levied on Family Basis
Xu Wei
DATE:  Feb 28 2018
/ SOURCE:  Yicai
China Party for Public Interest Proposes Personal Income Tax Levied on Family Basis China Party for Public Interest Proposes Personal Income Tax Levied on Family Basis

(Yicai Global) Feb. 28 -- The China Party for Public Interest, one of the eight legally recognized political parties in the country, has proposed levying personal income tax on a household basis.

China's easing of restrictions on having children may lead to huge disparities in per capita income due to great differences caused by different salary levels and the amount of support needed for children and elderly family members, the party said.

The China Party for Public Interest's proposed bringing in a new system at a government session, adding that the current personal income tax system cannot effectively play the role of adjusting income distribution.

The party suggests looking at systems used in foreign countries or Hong Kong when considering the establishment of a family-based income tax system, and put forward plans to collect statistical data and carrying out research as part of groundwork to modify the current tax threshold and personal income tax rates.

In terms of specific methods, the proposal suggests gradually establishing a family-based tax system taking into account China's large population, complicated situations and huge disparities. In the early stages, taxes would be levied based on a household with spouses and minor children only. The plan could be extended to parents and grandparents who need support gradually once the system is more mature. The second stage would take into account husbands and wives working in different regions and may require a nation- or province-wide information sharing platform. The third part of the new system would gradually include other incomes such as labor service income and capital gains.

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Keywords:   NPC & CPPCC,China Zhi Gong Party,Personal Income Tax