The second anniversary of the tax reform: over 100 million people are exempted from paying, will the middle class be the beneficiaries in the next stage?
Eleventh is approaching, which means that the most powerful personal income tax (hereinafter referred to as "individual tax") reform in China's history has been launched for nearly two years.
In the past two years, the reform ultimately benefited 250 million people and achieved tax cuts of over 560 billion yuan, of which more than 100 million people no longer need to pay individual taxes.
What is the effect of this round of tax reform?
Will there be new tax cuts in the next step?
Tax cuts exceed expectations
In order to reduce the personal income tax burden of ordinary people and improve the individual tax system, China launched the seventh tax reform in history on October 1, 2018.
Among them, the tax reduction measures most concerned by the outside world include raising the tax threshold (that is, the basic cost deduction standard) from 3,500 yuan/month to 5,000 yuan/month; the three-tier low tax rate range has been greatly expanded, and the tax rate is substantially reduced; introduction There are 6 special additional deductions for children's education, housing loan interest or rent, and support for the elderly, which is equivalent to a further increase in the threshold.
Xiaoling, who worked in Shanghai and earns nearly 20,000 yuan a month, told China Business News that before this tax reform, she paid close to 3,000 yuan a month. After the reform, she paid nearly half of the tax every month, which means she earns more in a month. It's almost 1500 yuan, very happy, so you can buy more things.
"The tax reduction effect of this tax reform is very obvious, especially in reducing the tax burden of low- and middle-income earners, increasing residents' income, and boosting consumption to a certain extent." Professor Shi Wenwen from China University of Political Science and Law told China Business News. .
According to data from the fiscal and taxation department, from 2018 to the end of 2019, the total scale of individual tax reductions was about 560.4 billion yuan, and 250 million people benefited from this, of which about 120 million people no longer need to pay personal income tax.
The Ministry of Finance even stated that the scale of individual tax cuts in 2019 exceeded expectations.
Liang Ji, a researcher at the Chinese Academy of Fiscal Sciences, told China Business News that the 560 billion yuan tax cuts accounted for more than 50% of the total tax revenue in 2019, and the overall tax cuts are large.
The individual tax reform has benefited 250 million people, accounting for more than 30% of the total employed population in 2018, and the benefits are widespread.
Moreover, this round of reforms mainly benefited the low- and middle-income groups. In comparison, the low- and middle-income groups have a higher marginal propensity to consume, and the corresponding tax cuts have a better effect on the economy.
In addition to tax cuts, the personal tax system has undergone substantial adjustments.
Before the individual tax reform, my country adopted a classified individual tax system and adopted different taxation methods for different incomes.
In this individual tax reform, for the first time, four incomes including wages and salaries, labor remuneration, author's remuneration and royalties have been combined into comprehensive income, and a uniform tax rate is adopted to pay taxes.
This move makes the personal tax move from a classified tax system to a comprehensive and classified personal tax system.
Shi Wenwen stated that the current personal tax system of major countries mainly adopts the syndrome tax model, because it is more fair, embodies the principle of taxation according to the quantity and can also avoid tax evasion to a certain extent.
Due to the consideration of the ability of collection and management, the current comprehensive taxation of the above four labor remuneration incomes in my country is still successful in terms of the final implementation effect, taking into account fairness and efficiency.
Liang Ji said that the introduction of a comprehensive tax calculation method is one of the biggest highlights of the individual tax reform. It is a qualitative change from 0 to 1, plus 6 special additional systems, which fully reflects the principle of individual income tax levying by amount. , Reflecting the concept of fair reform.
In line with the comprehensive annual tax calculation, the tax collection and management model has also undergone major changes.
In the past, individual taxes were withheld and paid by units, and taxpayers seldom dealt directly with tax authorities.
After adopting the annual comprehensive income taxation method, some taxpayers paid more or less tax in the previous year.
Therefore, for the first time in the first half of this year, my country initiated the settlement of individual taxes. Taxpayers need to recalculate all their income annually, with more refunds and less supplements.
Shi Zhengwen believes that the settlement of individual tax is the first time that a natural person taxpayer in my country has directly paid individual tax to the taxation authority. It is very successful at present.
This is due to the reduction of taxpayers or tax refunds in the system design, as well as the direct declaration of taxpayers.
For example, the annual income is less than 120,000 yuan or the amount of tax payment does not exceed 400 yuan can be exempted from declaration, and no final settlement is required; the unit can handle the final settlement of employees on behalf of others.
Professor Li Xuhong from Beijing National Accounting Institute told China Business News that in terms of personal tax collection and management, the taxation department mainly uses big data and information technology to ensure that natural persons’ taxpayers can quickly and accurately complete the final calculation, reflecting the improvement of my country’s collection and management level. And the improvement of national governance.
In addition, since 2019, the state has introduced preferential tax measures for high-end talents or in short supply in places including the Guangdong-Hong Kong-Macao Greater Bay Area, Shanghai Free Trade Zone Lingang Area, Hainan Free Trade Port and other places to reduce the tax burden of related talents. .
Li Xuhong said that human capital and technology are the core elements to promote high-quality economic growth. With the development of Hainan Free Trade Port and the introduction of talent incentive policies in the Guangdong-Hong Kong-Macao Greater Bay Area, the tax burden of high-end talents in this part of the region will be increased. As a result, the special preferential policies for regional personal tax will help attract high-end talents in various fields. Human capital will improve the industrial structure and stimulate regional economic growth by enhancing the level of scientific research and development and technological innovation.
Structural lightening is the general trend
The personal tax reform in 2018 is not the end, but the first step in my country's comprehensive and classified personal tax reform.
Liang Ji believes that my country’s personal tax still has a lot of room for improvement, and the following aspects can be focused on in the future: how to determine the scientific basis for the adjustment of the personal tax "threshold"; the tax rate and the level of taxation should be determined by middle-income groups. The expansion of the comprehensive income; whether the production and operation income can be gradually included in the scope of comprehensive income; how to balance labor income and capital income tax, and the coordination of corporate income tax and personal income tax.
The people are very concerned about whether the tax threshold (5000 yuan/month) will be further increased?
Prior to this, Vice Minister of Finance Cheng Lihua publicly stated that the standard of 5,000 yuan is not fixed and will be dynamically adjusted in the future based on the deepening of personal income tax reform and changes in the level of basic consumption expenditures of urban residents.
"Behind the threshold is the concept of basic livelihood deduction. Therefore, the standard and level of basic livelihood deduction should be calculated scientifically, and an automatic adjustment mechanism linked to the price level should be established." Liang Ji said.
Shi Zhengwen believes that this levy point should not be adjusted in the past two years, because low-income people do not need to pay individual taxes after the reform, even if they pay very little.
However, as the income of the old people increases, the effect of tax cuts will be weakened, and structural tax cuts should be considered in future tax reforms.
He said that in the long run, my country needs to increase the proportion of direct taxes. As one of the direct taxes, the gradual expansion of the scale of individual taxes is the general trend, which is also conducive to the role of individual taxes in regulating income distribution.
However, from the perspective of the tax structure, the middle-class tax burden is relatively heavy. The central government proposes to expand the middle-income group. In the future, it can be considered to reduce the tax burden of this group of people. The effect of reducing tax rates.
Many scholars previously believed that compared with major countries, the highest marginal tax rate of 45% in my country is too high, which is not conducive to attracting high-end talents. This tax rate should be lowered.
At present, places like Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Port have given preferential tax policies to attract high-end talents or talents in short supply to ensure that the actual tax burden does not exceed 15%.
Shi Zhengwen stated that the current personal tax on labor income (such as comprehensive income) is subject to a maximum marginal tax rate of 45%. This tax rate is mainly applied to intellectuals and various talents such as experts, scholars, scientific and technical personnel, cultural figures and industry experts.
An excessively high tax rate will severely impact the enthusiasm for innovation and creation, and deviate from the development goals of an innovative country and the goal of improving my country's cultural soft power.
He suggested that in the future, we can consider reducing the maximum marginal tax rate of individual tax to 30% to 35%, and incorporating operating income into comprehensive income to make the tax system more fair.
In addition, the current capital income tax rate is 20%, which is significantly lower than the maximum marginal tax rate for labor income. Many high-income groups mainly receive capital income or property income such as stocks and equity.
Earlier, the State Council issued the "Implementation Opinions on Stimulating the Vitality of Key Groups and Increasing the Income of Urban and Rural Residents", which proposed to balance labor income and the negative level of capital income tax, focus on promoting fair opportunities, and encourage more groups to get rich through hard work and wisdom.
At present, the dividends, bonuses, stocks and bonds from the acquisition and sale of stocks in my country to the holding period almost enjoy the tax benefits of the entire chain.
Some experts suggested that the tax incentives for short-term capital gains should be cancelled.
Shi Zhengwen believes that the individual tax rate should be appropriately increased for speculative capital gains. On the contrary, the tax rate can be appropriately reduced for long-term capital, which will help the capital market to develop more healthily.
Liang Ji said that the future coordination of corporate income tax and personal income tax should focus on solving the problem of double taxation of capital income and improving the income tax of partnership enterprises.
Li Xuhong believes that in the future, we can further optimize the comprehensive taxation and classification taxation model, and improve the comprehensive taxation method when conditions permit.
Exploring the method of calculating levy on a family basis.
In addition, increase tax incentives for human capital talents, and at the same time take advantage of modern collection and management, improve the level of digital tax governance, continue to implement the tax reduction effect of personal tax, and reduce tax for low-income groups.
Chen Yikan