Nanning Municipal Finance Bureau held the Publicity and Interpretation Conference on “People’s Republic of China Individual Income Tax Law Amendment (Draft)” (hereinafter referred to as the “Draft”), convening a number of financial and tax experts in Nanning to explain and share ideas on the highlights of the personal income tax reform and the people’s main concerns regarding the “Draft”.
This year, the “Draft” is submitted for deliberation by the third meeting of the 13th NPC Standing Committee, which has attracted much attention. This is the seventh major overhaul since the introduction of the Individual Income Tax Law in 1980. So what are the highlights of this tax reform? What has changed that is closely related to the public?
It was revealed that the reform of individual income tax is powerful with lots of highlights, for example, to include main individual labor income items in the scope of comprehensive taxation and implement the annual summary calculation of tax payment; reduce the tax level and relieve the tax burden of the vast number of taxpayers to make the personal income tax burden more reasonable through the “Package” of measures such as increasing basic salary threshold for the individual income tax, establishing the special additional deductions, and optimizing and adjusting the tax rate structure; and establish a collection and management system in line with the new tax system, further improve the natural person tax collection and management system, improve tax compliance and so on.
Compared with previous reforms, the “Draft” has added children education, medical care for serious diseases and other 3 special additional deductions, while continuing to retain the “Three Insurances and One Pension” and enterprise annuity, occupational annuity, commercial health insurance and other deduction items. In the next step of determining the collection and management measures for special additional deduction, taxpayer declaration information and procedure will be as simplified as possible to ensure the accuracy of special additional deduction information through inter-department information sharing exchanges so that taxpayers can fully and easily enjoy the policy.