Chinese authorities on Monday denied that the country may raise personal income taxes on those earning more than 120,000 yuan ($18,460) a year, as netizens responded furiously to a possible tax increase on the country's emerging middle class.
Citing unnamed experts affiliated with the State Administration of Taxation (SAT) and the Ministry of Finance, the Xinhua News Agency on Monday reported that suggestions of higher tax rates for those residents with earning above 120,000 yuan per year misread the document and were mere rumors.
Despite the clarification, a document from the State Council, China's cabinet, that indicated a possible increase in income taxes had already resonated over the past few days.
The State Council document, released on Friday, was aimed at addressing issues such as "the lack of human capital accumulation," "difficulties in raising income" and creating a fair environment. But one paragraph that suggests adopting higher rates for high income earners drew attention.
The government should gradually establish a personal income tax system that combines both comprehensive and classified tax systems, further reduce the tax burden on middle and lower income earners, adjust incomes, and appropriately regulate the taxes of high income earners, the document said.
Many residents, particularly those in first-tier cities like Beijing and Shanghai, have raised concerns about any tax hikes and stressed high cost of living in these big cities.
Following the document's release, articles that suggested a raise in taxes for high income earners, who earn above 120,000 yuan a year have been widely shared on Chinese social media sites, and received comments expressing shock and disbelief over such a low threshold for higher incomes.
"Earning 120,000 a year is high? After all our daily expenses, with that income, we can't even afford a one-square meter home, and you are telling me that's high income," one netizen said on Weibo, a popular social media platform in China, on Monday.
Chinese authorities on Monday denied that the country may raise personal income taxes on those earning more than 120,000 yuan ($18,460) a year, as netizens responded furiously to a possible tax increase on the country's emerging middle class.
Many residents, particularly those in first-tier cities like Beijing and Shanghai, have raised concerns about any tax hikes and stressed high cost of living in these big cities.
