File photo shows a local tax office in Huaibei City, East China’s Anhui Province. (Photo: VCG)
China’s top legislature on Friday approved an amendment to the tax law, which raises the minimum threshold for personal income tax exemptions to 5,000 yuan (around $730) a month.
The amendment also adds special expense deductions for items like caring for the elderly, children's education, continuing education, treatment for serious diseases, as well as housing loan interest and rent.
The current law has undergone seven revisions since it was passed in 1980, when the original threshold for individual income tax exemption was 800 yuan per month.
Individual income taxes were the third major contributor to China's overall tax revenue, behind the value-added tax and enterprise income tax. In 2017, China collected individual income taxes worth nearly 1.2 trillion yuan, or about 8.3 percent of total tax revenue.
Speaking to reporters at a press conference, Vice Minister of Finance Cheng Lihua said the standard has fully taken into consideration the factors of per capita consumption expenditure of urban residents, average burden of the employed and the consumer price index.
(With input from Global Times, Xinhua)