NPC debates further raising tax threshold
By Zhao Huanxin (China Daily)
Updated: 2005-08-25 05:57

It was understandable, though technically against government rules, that 11 provinces and municipalities have already ventured to raise the tax threshold to 1,200 yuan (US$148) or 1,600 yuan (US$197), Jia said.

But the proposed 1,500 yuan (US$185) starting point would leave many people unsatisfied, he warned.

Zhao Di, another legislator, said with the current rate of development, if the 1,500 yuan (US$185) level was adopted, the law would soon have to be amended again. If the threshold were set higher, it would be able to remain unchanged for longer.

Wu Zengrong, another member of the NPC Standing Committee, said: "I think the threshold should be raised further to 2,000 yuan (US$247), since the law is designed to alleviate disparity in incomes, it should primarily target higher wage earners and tax evasion."

But lawmaker Yang Xingfu said further investigations are needed before the new benchmark is decided, be it 1,500 yuan (US$185), 1,800 yuan (US$222) or 2,000 yuan (US$247).

Some legislators said the law should be amended differently.

Vice-Chairman of the NPC Standing Committee Cheng Siwei said the draft amendment proposed a fine for high-income earners failing to file their own tax returns, but the fine, ranging from half to five-times the evaded amount, is too flexible and could lead to inconsistent enforcement.

If a tax-evader is fined only half of what he has evaded, it makes the evasion worth his while because he still "earns" half of the evasion, Cheng said.

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