Individuals with an annual income of less than 100000 yuan are basically exempt from paying personal income tax
2024-10-15
Personal income tax declaration data can objectively and truthfully reflect the composition of individual income tax. According to the personal income tax declaration data of the State Administration of Taxation in recent years, high-income individuals with an annual income of over 1 million yuan account for about 1% of the taxpayers in China's personal income tax declaration. However, these individuals declare and pay more than 50% of the total personal income tax, and the top 10% of individuals with declared income in the country pay more than 90% of the total personal income tax. Li Ping, Deputy Director of the Tax Science Research Institute of the State Administration of Taxation, introduced that the proportion of individuals with personal income ranking in the top 1% and top 10% of China's population paying taxes is relatively high, which conforms to the principle of fairness in tax law that "tax burden must be distributed according to the taxpayer's ability to bear", and is also consistent with the fact that the proportion of individuals with the highest income in major countries around the world paying personal income tax accounts for the majority. This indicates that the 'raising' effect of personal income tax is still quite obvious, and personal income tax has played a positive role in regulating income distribution and promoting social equity. At the same time, the 'benefiting the low' effect of personal income tax has also been fully utilized. From the perspective of comprehensive income tax payment, low-income groups basically do not need to pay taxes or only need to pay a small amount of taxes after enjoying the dividends of tax reform. Most of the personal income tax is contributed by the middle and high-income groups, fully reflecting the basic orientation of China's personal income tax system of 'middle and high-income earners pay more taxes, low-income earners pay less taxes or do not pay taxes', "Li Ping told reporters. Why do low-income groups basically not need to pay personal income tax? Li Ping explained that in 2018, China revised the Personal Income Tax Law for the seventh time, raising the basic deduction standard from the original 3500 yuan per person per month to 5000 yuan. This standard is relatively high compared to the per capita national income internationally and can roughly cover the current per capita basic consumption expenditure with some room for improvement. At the same time, six special additional deductions will be established for children's education, elderly care, housing loan interest, housing rent, continuing education, and major illness medical care. In 2022, a special additional deduction will be added for the care of infants and young children under 3 years old. In 2023, the standards for three special additional deductions for the care of infants and young children under 3 years old, children's education, and elderly care will be raised. Among them, the special additional deduction standards for the care of infants and young children under 3 years old and children's education have been increased from the original 1000 yuan per child per month to 2000 yuan, and the special additional deduction standards for supporting the elderly have been increased from the original 2000 yuan per month to 3000 yuan. According to the 2023 annual personal income tax settlement and payment data released by the State Administration of Taxation, which ends at the end of June this year, after raising the special additional deduction standards for the care of infants and young children under the age of 3, children's education, and elderly support in 2023, about 67 million people nationwide have enjoyed the benefits of this policy, with a tax reduction scale of over 70 billion yuan and an average tax reduction of over 1000 yuan per person. Among them, tax reductions for children's education, elderly care, and care for infants and young children under 3 years old are approximately 36 billion yuan, 29 billion yuan, and 5 billion yuan, respectively, providing timely policy dividends to taxpayers who have both elderly and young parents. These deductions have a wide coverage and high amount, greatly reducing the tax burden on low - and middle-income earners. Tax data shows that taxpayers enjoy two special deductions per capita. "Li Ping gave an example that for taxpayers who" have elderly parents and young children, "if they have a child and share the education special deduction with their wife, they can deduct 1000 yuan per month; If he has a brother and shares the special deduction for supporting the elderly with him, an additional deduction of 1500 yuan/month can be made, totaling 2500 yuan/month, which is 30000 yuan/year. If taxpayers have two children or only children, the deduction amount is higher. In addition to the basic deduction of 60000 yuan per year, and after deducting the "three insurances and one fund" (calculated based on an annual salary of 100000 yuan, theoretically about 15000 yuan can be deducted), individuals with annual comprehensive income not exceeding 100000 yuan are basically exempt from paying personal income tax. Tax data shows that currently, more than 70% of the comprehensive income earners in China do not need to pay personal income tax. Among the remaining less than 30% of actual taxpayers, more than 60% are only subject to the lowest tax rate of 3%, and the amount of tax paid is relatively small. Li Ping stated that in the next step, the tax department will thoroughly implement the deployment requirements of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, cooperate with relevant departments to improve the comprehensive and classified personal income tax system, better play the role of personal income tax in regulating income distribution, better serve and improve people's livelihoods, and effectively promote common prosperity. (New Society)
Edit：Li Yi Responsible editor：Sun Jia Bin
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