Amended rules on personal income tax became effective on Thursday meaning that about 60 million Chinese will not be taxed on what they earn going forward.

Only 24 million people have to pay individual income tax after the amended law raised the monthly tax exemption threshold from 2,000 yuan ($313.2) to 3,500 yuan, according to the Ministry of Finance.

The new law reduces its previous nine-category progressive mechanism to a less-segmented seven-rank system, with tax rates ranging from 3 to 45 percent.

It also cuts the minimum tax rate from 5 to 3 percent for people whose monthly incomes are between 3,500 and 4,500 yuan.

Previously, the government’s individual income tax revenue accounted for about 6 percent of its total revenue each year. – Xinhua

Source:cnbusinessnews