November 21, 2008

China to reduce income tax

The Chinese government's head economist, Zhou Qiren, said Friday that the country's legislative body has agreed to tax reductions to stimulate the economy.

As far as I know, the National People's Congress has already reached a consensus to raise the individual tax income threshold, currently set at about $300 per month, Zhou said.

The official did not say where the new income threshold would be set, but he said a proposal to raise the level where the tax is triggered to about $1,100 per month was too high, the state-run news agency, Xinhua, reported.

The tax reduction, meant to stimulate the Chinese economy, follows a $586 billion economic stimulus package announced by the Beijing government Nov. 9.