Zeng Jinhua (
Economic Daily): Currently, individual income tax is China’s third largest tax only after value-added tax and corporate tax. As we enter a new era and encounter new situations, to push forward the reform on individual income tax is becoming urgent. This amendment draft has taken into account successful personal income tax practices and experiences in other countries. It has also taken into full consideration China’s reality, focusing on people’s welfare.
The reform aims to transform the taxation classification into one composed of a synthesis tax system and a classification system, which is a common practice in the world. In addition, tax deductions will be applied to many items, such as the cost of children’s education and continuing education, medical fees for major diseases, interest on housing loans and other loans. Moreover, the anti-avoidance clause in the draft will prevent individuals from dodging taxes and fill other loopholes.
The reform will raise the requirement for taxation authorities’ capabilities and techniques for managing the new situation. Law enforcement should also be stepped up to punish tax evasion and fraud. At the same time, the public’s awareness of the taxation law should also