More than 70 percent of people earning an income, did not have to pay tax in China last year, as the country’s individual income tax reform has significantly lightened the burden on lower-income earners, the latest data from the State Taxation Administration showed on Tuesday.
Individuals with an annual income of less than 100,000 yuan($13,600), did not have to pay personal income tax last year, thanks to the country’s tax deduction policies.
In 2023, China further eased the tax burden on families by increasing special deductions for child care, education and the elderly.
Such changes have benefited an estimated 67 million people nationwide, resulting in tax cuts exceeding 70 billion yuan. On average, individuals saw their tax bills reduced by more than 1,000 yuan, the STA said on Tuesday.
Li Ping, the deputy director of the STA’s tax science research institute, said the move is part of China’s broader push to create a more equitable society amid concerns over growing wealth disparities.
“Latest data showed that the role of income tax in adjusting the higher-income bracket, is quite evident. Personal income tax has played a positive role in balancing income distribution and promoting social fairness in the country,” Li said.
