Xinhua news agency, Beijing, August 27, Xinhua news analysis: the seventh overhaul of the individual tax law has brought billions of taxpayers far more than tax cuts

Xinhua News Agency reporters Han Jie, Chen Fei, Yu Qiongyuan

The draft decision of the Standing Committee of the National People's Congress on Amending the individual income tax law was submitted to the fifth meeting of the Standing Committee of the 13th National People's Congress on July 27 for deliberation, which is a step closer to the appearance of the revised new tax law.

This is the seventh overhaul of China's personal income tax law since its promulgation in 1980. The standard of basic deduction of expenses is planned to be raised to 5000 yuan per month. It is planned to comprehensively calculate taxes on wages, salaries, labor remuneration and other incomes, and introduce the concept of special additional deduction for the first time

The draft decision is no longer focused on the simple cost reduction standard, but on the historic transformation of China's individual income tax system from classified tax system to comprehensive tax system. The impact on billions of taxpayers in the future will be far more than tax reduction.

"Comprehensive taxation" is undoubtedly the key word of this tax law amendment.

With reference to the mainstream mode of the international personal income tax system, China's reform will promote the individual income tax system that combines integration and classification, that is, to sum up some income items, to calculate and pay taxes on an annual basis, and to collect other income items on a classified basis.

For example, in the draft decision, for the first time, "comprehensive income" refers to the income from wages, salaries, remuneration for labor services, remuneration for contributions and royalties, which were previously separately taxed; however, the income from operation, interest, dividend, bonus, lease of property, transfer of property and incidental income are still taxed by category.

Compared with classified taxation, comprehensive taxation is more fair.

For example, Xiao Zhang's monthly income is 5000 yuan, but only comes from salary and salary channels. Under the current tax system, "three insurances and one fund" are not considered to be deducted, and 45 yuan of individual tax is required to be paid. Xiao Li's monthly income is 5000 yuan, but it comes from multiple channels, including 3000 yuan of salary, 800 yuan of labor remuneration, 600 yuan of rent and 400 yuan of manuscript remuneration. Under the current classified tax system, no individual tax is required.

From this point of view, this amendment will bring a more fair tax model. In the future, with the promotion of reform, more income will not be excluded from the comprehensive tax collection, so as to better promote individual tax to play the role of regulating fair tax burden and narrowing the income distribution gap.

Not only that, the introduction of special additional deduction will stick the "personalized" label for individual income tax payment.

Education of children, support of the elderly, in-service further education, treatment of serious illness, purchase or rent part of the expenditure According to the draft decision, all the necessary expenses in life are expected to be deducted in the declaration of individual income tax. Compared with the days when the company mainly relies on withholding, everyone may have a "personalized" bill to pay individual income tax in the future.

Among the many opinions on the draft amendment to individual tax laws, many focus on the new concept of special additional deduction. "Can ten thousand yuan be deducted for a year when a child attends a training class", "how to define the cost of supporting the elderly", "how much can the house rent be deducted for a year" One by one, the concerns of taxpayers have been expressed. With the continuous introduction of the follow-up implementation rules, social policies related to the well-being of the people will be constantly improved.

According to the draft decision, taxpayers who have obtained comprehensive income will also have a great change in the way of tax payment. The existing mode of withholding agents' withholding and withholding will be changed into the mode of withholding and withholding at ordinary times, year-end summary declaration, over refund and less compensation.

Perhaps in the near future, more taxpayers will be used to making individual income tax returns at the end of the year. With the deepening of personal tax reform, it will be a new challenge to establish a natural person tax declaration system that is suitable for the future comprehensive income tax system, and will force the tax authorities to continuously improve the level of collection and management, and bring more tax payment convenience to taxpayers.

The blueprint has been drawn and the key first step has been taken.

From classified tax to comprehensive tax, from monthly tax to annual tax The revised draft decision on individual tax law submitted to the Standing Committee of the National People's Congress for deliberation will make the direction of future individual tax system reform clearer. Only by deepening the reform measures towards the set goals, can we better respond to the expectations of the people and let a more equitable tax structure boost the stability of China's economy.