China's Taxpayers Pay USD4.5 Billion Less in First Month of Reform
Liao Shumin
/SOURCE : yicai
China's Taxpayers Pay USD4.5 Billion Less in First Month of Reform

(Yicai Global) Dec. 3 -- Chinese authorities reported that national personal income tax takings fell by CNY31.6 billion (USD4.5 billion) in October, the first month following adjustments, with over 60 million people no longer needing to pay up based on their salaries.

The biggest tax reduction was seen in the manufacturing sector, while that of private enterprises is also clear, state-backed newspaper Guangming Daily reported tax authorities as saying. 

The reform has optimized the tax structure, widening the gap between middle and low-grade rates, as part of efforts to benefit middle and low-income groups. Those with salaries lower than CNY20,000 (USD2,875) in October, which comprises most taxpayers, contributed 50 percent less. The fall in tax amounted to CNY22.4 billion, accounting for 70.9 percent of total decline for the month, according to Luo Tianshu, director of the department of income tax at the State Administration of Taxation.

Tax payments among private enterprise employees dropped CNY16.5 billion in the first month of reform, accounting for 54.1 percent of total reductions in October.

"The first tax reporting period after the reform shows that private enterprises' tax reduction and rate were relatively large, which will further stimulate the sector," said Li Wanzhao, director of the Taxation Research Institute at SAT. 

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Keywords: Individual Income Tax Reform