China has lessened the tax burden on its poor by raising the income tax threshold.
The Standing Committee of the National People's Congress (the country’s highest state body) lifted the threshold from 2,000 yuan (about $309) to 3,500 yuan ($542) per month.
The committee explained that boosting the threshold was necessary and timely.”
Indeed, the poor in China have been battered by rising inflation.
According to the state-controlled Xinhua news agency, the committee initially wanted to hike the threshold to 3,000 yuan, but was dissuaded by online opposition from the public who thought it should be higher.
The change was made thanks to the appeal by netizens and comments that we received, committee member Ye Qing reportedly said.
According to BBC, only about 12 percent of the Chinese workforce makes more than 3.000 yuan per month – meaning tens of millions of people have been removed from the burden of paying taxes.
Quoting a tax official, Associated Press said the measure will cut the number of taxpayers from 84 million (or 28 percent of workers covered by the law), to about 24 million (or only 7.7 percent).
It is a serious attempt to maintain social stability and redress the problems of inflation, said Steve Tsang, director of the China Policy Institute at Britain's University of Nottingham, according to AP.
Reuters reported that personal income tax revenues in China spared to 483.7-billion yuan in 2010, from 41.4-billion yuan in 1999, partially due to increased tax collection.
In May 2011 alone, such revenues amounted to 50.2-billion yuan, a 33.4 percent jump from a year-ago.