China raises individual income tax threshold

CHINA'S top legislature today adopted a law amendment to raise the country's individual income tax threshold from 1,600 yuan (US$218.58) a month to 2,000 yuan.

The amendment will go into effect as of March 1, 2008.

The individual income tax threshold increase is expected to relieve the economic burden of medium- and low-income earners amid the price increase of goods.

Raising the threshold of individual income tax collection means a reduction of 30 billion yuan in state revenue a year, according to official statistics.

However, the rise in personal income tax collection threshold will free 70 percent of income earners from paying income tax. The current threshold of 1,600 yuan makes 50 percent of income earners free from paying the tax.

China's consumer price index climbed 6.9 percent in November, marking the fourth consecutive month the index had been above six percent. Price increases for various goods have already placed a burden on common families.