Basic situation of personal income tax in China

With the development of China's economy and the progress of various social undertakings, taxation plays a more and more important role in our life. Tax is not only the main tool to raise the state revenue, but also the national macro-control important means. There is a growing concern about taxation in all sectors of society. In order to make the taxpayers more in-depth and comprehensive understanding of China's tax system and related circumstances, we will be published in the article on the basic situation of some major taxes.　　This publication "China's personal income tax basic situation" for your reference. Personal income tax is a tax levied on the taxable income of individuals (natural persons). Since it was born in England in 1799, in the more than 200-year period of rapid development, not only in the geographical range from Europe to North America, Oceania, Asia, South America and Africa, has now become a common tax in the world, and with the improvement of the level of productivity and the continuous improvement of the individual income tax system, Personal income tax revenue in the proportion of tax revenue is also rapidly increasing, in many countries, especially developed countries have established the status of the main tax, as the main source of revenue.　　In our country, the individual income tax system also experienced a process from nothing to development. First, the basic situation of personal income tax in China, the beginning of personal income tax is very late, the earlier legal documents related to income tax is the 1909 Qing government draft "Income tax regulations", compared to the western countries of the origin of personal income tax lag behind 110 years. The development of personal income tax in modern times basically stalled.　　Until the founding of New China, the personal income tax in China has entered a new stage of development. January 1950, AC issued a programmatic document on the construction of the new China's tax system, "the implementation of the national tax", which involves the tax on personal income is mainly paid income tax and deposit interest income tax, but for various reasons, has not been levied. 1978, China's reform and opening-up policy, tax system construction has entered a new stage of development. In order to meet the needs of reform and opening-up, the individual income tax levied on foreign individuals and the income tax and individual incomes of the urban and rural households levied by the domestic residents are tax.　　In 1994, the three tax amendments were combined, promulgated the implementation of a new personal income tax law, initially established in line with the actual personal income tax system. Since 1994, the personal income tax law has been further developed and perfected. August 30, 1999, the Ninth NPC Standing Committee 11th meeting passed the "on the amendment of the People's Republic of China personal income tax law" decision, the personal income tax law, "savings deposit interest" tax exemption items deleted, and authorized the State Council to resume the levy of personal income tax savings interest. (from October 9, 2008 onwards, in order to tie in with the National macro-policy regulation and control needs, the tax is temporarily exempt from levy). September 2000, the Ministry of Finance, the State administration of taxation in accordance with the State Council on the spirit of notice, formulated the "individual-owned enterprises and partnership investors levy personal income tax" (tax [2000]91 number), clear from 200From the 0-year January 1 onwards, individual-owned enterprises and partnership enterprises to stop the levy of enterprise income tax, the production and operation of their investors levy personal income tax, thus resolving the individual proprietorship and the partnership investors double taxation problem.　　At the same time, in 2005 and 2007, the country's two-time increase in wages deducted the cost of the standard, further reducing the middle and lower income bracket. With the development of personal income tax, it plays a more and more important role in organizing revenue and adjusting income distribution. Since the introduction of the personal income tax in 1980, the income has been increasing sharply, especially since the implementation of the new tax system in 1994, the income of individual income tax has increased steadily by 34% per annum. 1994, our country only levy 7.3 billion yuan of personal income tax, 2008 increase to 372.2 billion yuan (see figure I). In the ~2008 of 1994, the share of personal income tax revenue to GDP rose from 0.15% to 1.24%, and the proportion of tax revenue increased from 1.4% to 6.4%. The personal income tax is one of the most strong income tax in the 1994 tax system reform, and has become the fourth major tax in the domestic taxation, which has leaped into the second place of local tax revenue in some regions, and become the main source of local revenue. With the further development of economy, the increasing of tax administration level, especially the social tax consciousness, the income and proportion of individual income tax will be further improved.　　The state levy these taxes, after two times the allocation of financial, to low-income groups tilt to achieve the goal of regulating income distribution. Second, the main contents of the current personal income tax system in China from the international perspective, the tax system of individual income tax is divided into comprehensive tax system, classified tax system and integrated and classification of the tax system (also known as the mixed tax system) three types. The comprehensive tax system is the time unit of the annual tax, which requires the taxpayer to levy the excess progressive or proportional tax rate after deducting the legal subsistence deduction and deductible fee. The classification tax system is to classify the income of different kinds of individual sources, deduct different expenses separately, and tax at different tax rates. The combination of comprehensive and classified tax system has the characteristics of comprehensive tax system and classified tax system. At present, most countries in the world adopt comprehensive tax system or combination of integration and classification of tax system. And our country is the classification of tax system, the main contents include: 1, the taxpayer: individual income tax payer includes the resident taxpayer and the non-resident taxpayer, the resident taxpayer is the person who has a residence in China, or has no domicile and has resided in the territory for a year, and the income obtained from the inside and outside China,　　Shall pay individual income tax according to law; non-resident taxpayer is a person who has lived in China for less than one year without residence or residence or without residence, and the income obtained from China shall pay personal income tax according to law. 2, the tax model: the current individual income tax classification levy system, taxable income is divided into 11, including wages, salary income;Income from operation, income from payment of remuneration, royalties, income from property leasing, income from transfer of property, incidental income, other income obtained by the financial Department of the State Council, and other proceeds of taxation, etc. The collection and administration formalities of the classified taxation model are simple and convenient, which can be used for the execution of both parties, and may be taxed according to different methods of income, which is beneficial to embody the national policy.　　However, with the increasing diversification of income sources, the malpractice of classified taxation pattern is becoming more and more obvious, compared with the comprehensive tax system model, it is difficult to fully and completely embody the taxpayer's real tax ability. 3, tax rate: China's individual income tax rate includes the excess progressive rate and the proportional rate of two forms. Among them, the income of wages and salaries is applicable to the 5%~45% of the nine-level excess progressive tax rate; the income from the production and operation of individual businesses, the income from the contracting and leasing of enterprises and institutions, and the income from the production and operation of Sole proprietorship and partnership investors are applicable to the five-level excess progressive　　Royalties, interest, dividends, dividends, property leases, property transfers, incidental gains and other income are applicable to the proportional tax rate of 20%.　　4, the expense deduction: Our country current individual income tax deduction uses the quota deduction and the fixed rate deduction two kinds of methods, comparatively concise and easy, but for some circumstances more special family difficult to take into account completely. 5, Tax relief: In order to encourage specific taxpayers or care for some special groups, the personal income tax law and related laws and regulations set up a number of individual income tax exemption policy, mainly include: Sheng and military units, as well as foreign organizations and international organizations issued scientific, educational, cultural and other aspects of the prize; interest　　Units and individuals in accordance with the provisions of the Housing Provident Fund, basic Endowment insurance premiums, basic medical insurance premiums, unemployment insurance premiums, income obtained from personal transfers for more than 5 years, and the only family living room, urban residents ' compensation for demolition in accordance with national standards, and other income from tax exemption granted by the financial Department of the State Council. 6, the collection method: China's personal income tax deduction and the taxpayer to declare tax two kinds of tax methods. Income from salary, remuneration for work, remuneration, interest, dividends, dividends, etc., is generally paid by the units and individuals to pay personal income tax deduction.　　But for the income of more than 120,000 yuan in the year, from two or more in China to obtain wages, salaries, income from outside China and obtain the taxable income without withholding agents, and other circumstances of the taxpayer, it is required to the competent tax authorities to apply for tax returns. Third, on personal income tax and regulating income distribution in the modern tax system, the tax which regulates individual income mainly includes individual income tax, consumption tax, property tax, estate and gift tax. Personal income tax is the final link of income distribution-the tax levied by the individual income link, which belongs to direct taxation, which embodies the principle of universal and fair taxation. The individual income tax generally adopts the progressive tax rate,It reflects the higher income tax, the less tax on low-income earners, so as to achieve the goal of equitable income distribution.　　In western developed countries, personal income tax is one of the most important main tax categories, which plays an important role in gathering state revenue and fair income distribution. According to the present situation of our country, the individual income tax is the main function of adjusting income distribution by means of tax revenue while raising revenue. The individual income tax of our country always carry out "high income person pays more tax, the legislative spirit of less tax or no tax on low-income earners, on the one hand, increases the regulation of high-income earners by adopting progressive tax rates, imposing higher remuneration on extra high wages, and requiring their own tax returns for high-income earners who earn more than 120,000 yuan a year. 2008 years of income of more than 120,000 taxpayers to declare the number of 2.4 million people, accounting for the national personal income tax of about 3%, and the tax paid for 129.4 billion yuan, accounting for the total income of the national income of 35%, the declaration of their own personnel concentrated in the electricity, finance, petroleum, telecommunications and other departments and corporate shareholders Business executives and other occupations. On the other hand, for low-and middle-income earners, they can reduce their tax burden as much as possible. According to the current personal income tax system in China, the deduction standard for salary income is 2000 yuan/month, at the same time, the individual in accordance with the provisions of the State to pay the basic endowment insurance, basic medical insurance, unemployment insurance, Housing Provident Fund, such as "three risks and one gold" (generally accounted for the workers monthly wage income of about 20%) can be deducted before the tax, in addition, Personal income tax is exempt from the single child subsidy, childcare allowance and retirement wage. By this calculation, the monthly wage income below 2500 yuan has no need to pay personal income tax, the monthly wage income is 3000 yuan, 5000 yuan, 8000 yuan and 10000 yuan taxpayer, its monthly income tax amount is generally about 20 yuan, 175 yuan, 535 yuan and 825 yuan, tax burden (　　Taxable amount/monthly wage income) are 0.7%, 3.5%, 6.7% and 8.3% respectively, no more than 10%. From the point of view of project income, the personal income tax income of salary income in recent years accounts for about 50% of the total income of individual income tax. The reason: First, China's personal income tax mainly from urban residents, the current wage income is the main source of income of China's urban residents, according to statistics, 2008 China's urban residents per capita disposable income accounted for 71.6% of the proportion of wage income. Therefore, the wage earners as the main social groups (in foreign countries, including the developed world), constitute the biggest source of personal income tax. Second, in recent years, the wage income of workers has increased rapidly, the number of tax payers is increasing, personal income tax income rising. According to Statistics, 1998, China's urban workers annual average wage of 7479 yuan, 2007 for 24932 Yuan. The 1998 payroll taxpayers were 109 million, and 2007 increased to 850 million. The third is that the high-income earners contribute a lot to the tax. According to the State administration of Taxation Statistics, 2005, the national annual wage Income 2The proportion of taxpayers over 50,000 yuan is close to 5 of the total payroll tax, which accounts for about 15% of the gross tax on payroll.　　In 2007, the tax revenue levied on the income from payroll, which applies 20% (including) above (i.e. the monthly wage taxable income of more than 5000 yuan), accounts for 4.43% of the total taxpayer of the payroll, but the tax is 44.44% of the total payroll tax. Iv. on the basis of the principle of "tax on net income" of individual income tax, the basic principle is to ensure that the basic living of the residents is not affected and the basic subsistence expenses of the residents are deducted before tax.　　The determination of the wage deduction standard needs to take into account the growth of residents ' consumption expenditure and the factors of price increase. According to statistics, 2008 China's urban residents per capita consumption expenditure of 11242.9 yuan, that is, 937 yuan/month, far less than 2000 yuan/month deduction criteria, consider the number of workers to support the factors, According to the average per capita burden of 1.97 people in 2008, the consumption expenditure per capita of urban employment in 2008 years is about 1846 yuan/month, which is still below the cost deduction standard of 2000 yuan/month. 2008 China's urban units on the average wage of workers at 29229 Yuan, that is 2435 yuan/month, deduction of 2000 yuan fee deduction standard and "Three Insurance one gold" about 500 yuan, this wage level is not required to pay personal income tax.　　From 2008 to see the minimum wage, Shenzhen for 1000 yuan/month, Shanghai for 960 yuan/month, Beijing, Dalian for 800 yuan/month, Xian, Zhengzhou for 600 yuan/month, Yinchuan for 350 yuan/month, are far below the 2000 yuan/month deduction standard. If there is a significant increase in the cost-deduction standards, the beneficiaries are also high-income earners, and middle-income earners benefit less. For example, raise the deduction standard to 3000 yuan/month, a monthly salary of 5000 yuan taxpayers can only be reduced by 100 yuan/month, and the monthly salary of 100,000 yuan taxpayer reduced by 350 yuan/month, the deduction standard to 5000 yuan/month, a monthly salary of 5000 yuan taxpayers benefit 175 yuan/month, and a monthly salary of 100,000 yuan taxpayers benefited 1050 yuan/month, the deduction standard to 10000 yuan/month, the monthly salary of 5000 yuan taxpayers will still benefit only 175 yuan/month, and a monthly salary of 100,000 yuan taxpayers benefited 2800 yuan/month. Individual income tax is to adjust the main tax of income distribution, levy income mainly used to subsidize disadvantaged groups, etc., if the deduction amount increases excessively, the high income person pays a lot of tax to reduce, the national revenue also reduces, the state to the low income group's subsidy as well as the social security, the education, the medical　　Therefore, after the increase of the standard of expense deduction, the difficult group and the low income person not only can not benefit, but become the main group of interests affected.　　In the future, according to the economic development, consumer expenditure, market price level and other changes, the cost deduction standard will be adjusted in due course. FiveOn the issue of personal income tax reform personal income tax is one of the most complex taxes in the world, with strong policy, and also requires a higher collection and management and supporting conditions. In the case of large population, big difference of income between urban and rural areas and unbalanced development of region, it is very difficult to revise the step of personal income tax comprehensively. From the development of individual income tax system in developed countries, all of them have undergone a process of continuous reform and perfection, especially in the modern personal income tax system, which has high requirements for relevant management conditions and supporting measures, including the real name of savings, personal property registration, personal income Declaration and cross Audit, Credit card system and a large number of data computer processing. Since the levy of personal income tax in China has only more than 20 years, the system design, the means of collection and management are basically in accordance with the special conditions of our country in different periods, and the future reform and improvement of personal income tax will also be combined with China's national conditions, it is impossible to surpass our historical culture　　Especially in the case of many tax collection and matching conditions, our personal income tax reform will be gradual and perfect. The party's 16-session plenary decided to put forward the goal of establishing a combination of integrated and classified tax system. The so-called combination of integration and classification of the tax system, from the current international practice, it is generally a part of the taxable items to the end of the year to be integrated, the application of progressive tax levy, the other taxable items are levied according to the proportional tax rate. The model has the characteristics of comprehensive mode and classification mode, which can not only solve the problem of tax injustice in the classified tax system, but also discriminate the individual income items according to the specific policy objectives. But the integration and classification of the combination of tax model implementation needs to have the corresponding collection and management and supporting conditions, if there is no one with the appropriate management measures to match and protect, in theory, more equitable tax design in the actual operation may bring greater unfairness. Therefore, the current should be strong gas sound and improve the collection and management measures, including the strengthening of cash management, vigorously promote the residents credit card or cheque settlement system, as soon as possible to achieve the computer network between different banks; on the basis of the real-name system of personal deposits, it also implements the name registration system for important consumer goods such as personal financial assets, property and automobiles. , the establishment of a sound customs, industry and commerce, Labor management, entry-exit management, cultural management, foreign agencies and procuratorial and other departments to the tax authorities to provide relevant personnel economic transactions and income information system and so on, with these systems, the integration and classification of the combination of personal income tax reform can be successfully advanced.