Tax Rate in China is Low?
By Jian Shuo Wang on 2009-07-05 22:16 · GovernmentJust get back from the party. We talked about the tax rate in China, and it gave me the impression that the tax rate in China is low.
Business Tax
5% of revenue as operating tax, and 20% of profit - for an Internet company.
For other type, like the trading cmopany, they do not pay according to revenue - they pay value-add tax.
For certified high-tech company, the tax of the first 3 years will be 0, and half of the tax due in the following two years.
Personal Tax
Basically it is about 20% for most people, and up to 45% for the rich.
Is it high or low?
My 2 cents: I think the problem for today’s tax structure in China is not how high/low the tax is, it is about the government collecting the tax but do not provide the service they should.
6 Comments
At personal level, the federal income tax is progressive, the tax rate ranges from 5% to 35%, depends on personal income and deductions.
I think one obvious problem in China income tax system is ordinary guys (people who do regular jobs) paid income tax (payroll deduction), while the fat cats (rich guys) don't necessarily pay their fair share. The collection system and legal system are not there yet.
As to the use of tax payer money, the transparency is improving. For instance, I heard one story the people's congress hall paid 150,000 Yuan for two toilet rooms renovations :-)
Support what you said!!!!