Ten­ants bear­ing bur­den of tax on rented houses

China Daily (Hong Kong) - - COMMENT -

the new per­sonal in­come tax pol­icy that al­lows tax­pay­ers to deduct cer­tain amounts of money, such as for hous­ing loan in­ter­est or hous­ing rent, from their tax­able in­come, has come into ef­fect. A good pol­icy has come out that aims at light­en­ing peo­ple’s bur­den, but some peo­ple’s bur­den has be­come heav­ier be­cause there are those mak­ing use of the pol­icy to ben­e­fit them­selves. Ifeng.com com­ments:

START­ING IN JAN­UARY,

Re­ports show some house own­ers threaten to raise rents be­cause they worry the in­for­ma­tion col­lected from their ten­ants might lead to them hav­ing to pay realty tax in the fu­ture. The new per­sonal in­come tax de­duc­tion pol­icy of­fers an op­por­tu­nity for tax­a­tion de­part­ments to col­lect the in­for­ma­tion in­di­rectly from house renters, but the renters and house own­ers have dif­fer­ent in­ter­ests. Con­sid­er­ing the usual su­pe­ri­or­ity of house own­ers over renters in the mar­ket, renters will be the losers. If they refuse, they might be chased out of the prop­er­ties they rent from the own­ers.

House own­ers and hous­ing agen­cies should pay tax for their in­come from rents, but many of them sim­ply re­frain from reg­is­ter­ing their rent­ing con­tracts in or­der to avoid pay­ing the tax. That prob­lem has long

ex­isted and it takes quite huge, com­pli­cated ef­forts to col­lect all the in­for­ma­tion needed from house own­ers and agen­cies.

Those who im­ple­ment the pol­icy should have ex­pected this and filled in this loop­hole be­fore im­ple­ment­ing it na­tion­wide. Take the taxes in­volved in hous­ing for ex­am­ple, in or­der to pre­vent this, tax­a­tion de­part­ments must have a stronger sense of re­spon­si­bil­ity. It is their job to col­lect in­for­ma­tion from house own­ers for tax pur­poses, which pres­sure should not be shifted to the ten­ants. For ex­am­ple, they could in­tro­duce more fa­vor­able poli­cies for house own­ers who lease their houses out, so as to en­cour­age them to regis­ter will­ingly, in­stead of shift­ing the pres­sure to ten­ants.

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