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Mon Dec 3, 2018, 08:05 AM

Why only 2% of Chinese pay any income tax

“Of course not, I’m not an idiot,” says Liu Yongli, a chauffeur in Beijing, when asked whether he has ever paid personal income tax. Despite earning well above the tax-free threshold, Mr Liu (not his real name) breezily explains that he has never faced any consequences for tax-dodging. Cavalier views like his may help explain why personal income tax accounted for only 8% of total tax revenue in China last year, compared with an average of 24% in the oecd, a group of rich countries.

The finance ministry estimates that 187m people ought to be paying income tax. Yet a former finance official reckons that in 2015 only 28m people—just 2% of the population—did so. In theory, the income-tax reform on which the authorities are embarking, which the People’s Daily, the Communist Party’s main mouthpiece, is calling the most significant in the country’s history, is about narrowing the tax base, not widening it. The threshold at which tax becomes payable was raised from 3,500 yuan ($503) to 5,000 yuan a month on October 1st. The finance ministry says the number of people liable for income tax should fall to 64m as a result. But it also seems determined to make those who owe tax actually pay it—a change that could have dramatic implications for politics.

A revamp of the income-tax system has been in the works for several years. A tax-evasion scandal this summer involving Fan Bingbing, China’s most famous actress, who was exposed by a whistleblower for having ducked nearly 300m yuan in taxes, may have added urgency to the task. (Ms Fan was eventually fined 884m yuan.)

https://www.economist.com/china/2018/12/01/why-only-2-of-chinese-pay-any-income-tax

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Reply Why only 2% of Chinese pay any income tax (Original post)
Troll2 Dec 3 OP
oflguy Dec 3 #1
JaimeBondoJr Dec 3 #2
oflguy Dec 3 #3
Carlos W Bush Dec 3 #4
JaimeBondoJr Dec 3 #5

Response to Troll2 (Original post)

Mon Dec 3, 2018, 08:41 AM

1. You think Paris is burning right now?

That ain't nuttin. Wait until China clamps down on a billion Chinese.

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Response to Troll2 (Original post)

Mon Dec 3, 2018, 10:42 AM

2. $718 per month is the threshold for paying income taxes in China.

Only 64 million out of 1.39 BILLION reach that threshold. That's 5%.

Economic GIANT, that China... I guess making cheap toys doesn't pay that well for the majority who DO have jobs, and the coming Automation Revolution ain't gonna help.

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Response to JaimeBondoJr (Reply #2)

Mon Dec 3, 2018, 01:47 PM

3. 95% make less than 718 per month?

Wow

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Response to oflguy (Reply #3)

Mon Dec 3, 2018, 01:53 PM

4. Ain't communism grand?

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Response to Carlos W Bush (Reply #4)

Mon Dec 3, 2018, 02:45 PM

5. The Troll who posts all the bullshit about China thinks it is apparently.

This isn't something I'd post though. I'd be ashamed that ONLY 5% of the people in China make more than $708 every month.

The Troll posts some of the most fawning good news about China though, and almost always from The Asia Times.

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