(Yicai Global) July 25 -- China's tax cuts have left an extra CNY407.7 billion (USD59.3 billion) in people's pockets since personal income taxes started to be eased last October, boosting their spending capacity.

The tax intake from individuals fell 30.6 percent to CNY563.9 billion in the first half of this year from the same period in 2018, according to new figures from the State Tax Administration. It was the steepest decline among all categories. The tax base also shrank to 115 million people from 200 million because the lower tax band was raised.

People with medium and low incomes were particularly better off because of the cut in direct taxation, Shi Zhengwen, director of the tax law research center at China University of Political Science and Law, told Yicai Global.

Per capita disposable income rose 8.8 percent to CNY15,294 (USD2,224) in the first half due to a number of factors, including tax and fee cuts. After taking inflation into account, the increase was 6.5 percent.

The government has implemented three measures to reform personal taxation: raising the threshold at which people start paying tax to CNY5,000 (USD727) a month from CNY3,500; allowing tax deductions on six kinds of expenditure, including home rental, education fees and elderly care costs; and expanding the scope of low tax rates. 

Editor: Dou Shicong