Experts input on tax threshold changes

China's top legislature has sought experts' feedback just two weeks after requesting public input on a draft amendment to increase the minimum threshold for personal income tax from 2,000 yuan ($306) per month to 3,000 yuan ($461), the "People's Daily" reports.

Zhu Qing with Economics and Finance Institute of Renmin University of China said that in most developed countries, tax deduction accounts 24 to 40 percentage of the average monthly salary. According to the draft minimum threshold (2,800 yuan), the tax deduction is 100 percent of the average monthly salary.

China uses a nine-bracket progressive rating system, which applies a minimum tax rate of 5 percent to those who earn between 2,000 to 2,500 yuan and a maximum rate of 45 percent for those whose earnings exceed 102,000 yuan a month.

But, according to the draft, the minimum tax rate of 5 percent will be applied to those whose monthly salaries range from 3,000 yuan to 4,500 yuan and the peak rate to those who make more than 82,000 yuan a month.

Therefore, since rich people would benefit more from a higher threshold, the income gap will widen, instead of narrowing, according to the report.