Opinion

Public response to tax law

(China Daily)
Updated: 2011-06-01 10:45

As the National People's Congress (NPC), the top legislature, ended a month-long soliciting of public feedback on the draft amendment to the Personal Income Tax (PIT) Law on Tuesday, people are now concerned about whether or not the draft amendment will be adapted to reflect mainstream public opinion.

Since the draft amendment, which proposes the tax threshold be raised to 3,000 yuan ($460) a month from the current 2,000 yuan and the current nine brackets of the rating system be reduced to seven, was submitted to the top legislature in late April, the public has expressed unprecedented concerns. On the first day of its publication, the NPC received more than 100,000 responses and it had now collected more than 230,000, a record high for a single draft law.

In a move to further interact with the public, the NPC invited 16 public representatives on May 20 for face-to-face talks with relevant officials from its law and financial and economic affairs committees, the Ministry of Finance and the State Administration of Taxation, departments that all have a role in deciding the final amendment.

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According to the NPC, some of the 16 representatives were directly selected from netizens on its website and some were recommended by the All-China Federation of Trade Unions and the State Administration of Taxation and thus, it said, they can better represent the voices of "different regions, different vocations and different groups".

According to media reports, "a majority" of the 16 representatives spoke in favor of the proposed 3,000-yuan tax threshold, which would be in serious contradiction to the general impression that a majority of the public disapproves with that threshold. It is counterintuitive to believe that so many people would take all the trouble to submit their opinions to the NPC just to express their endorsement for the proposed amendments.

Since it was made public on April 20, the draft amendment to the PIT Law has drawn fierce public criticism for failing to take enough steps toward reducing the tax burden on people, especially middle-income groups. The 1,000-yuan rise in the tax threshold is also believed to be a shortsighted move, given that such a small rise will soon be offset by the rising consumer price index (CPI).

In a recent poll conducted by the NetEase website portal of over 100 domestic economists, 69 percent think the 3,000-yuan tax threshold is still too low. There are also many people who regard the current tax system as too simple to effectively regulate the gap between the rich and the poor.

The active responses of the public no doubt represent progress in the country's democratic legislation. It is more than obvious that transparent assessment of these public opinions is vital to the legitimacy of new laws.