A revised personal income tax law has been adopted by China's top legislators, raising the threshold for monthly income tax from 800 Yuan to 1600Yuan, a move that will help ease the burden on low-wage earners.

According to the statistics released yesterday by Liaoning local taxation bureau, around 1.93million wage earners in Liaoning province who paid income tax now will not pay income tax when the amendment takes effect next year. Government takings from personal income tax in Liaoning province will drop to 42.3% from 63.9% with the implementation of the new law.

In 2005, there are a total of 3.28million income tax payers in Liaoning province. There will be 1.35million wager earners left who are expected to pay personal income tax when the new law comes into force. According to the new law, income tax will be levied after deduction for pension insurance, medical insurance, unemployment insurance, employment insurance, and housing provident fund. It means the threshold for monthly income tax is actually higher than 1600 yuan.

The increased threshold will not have a bearing on foreigners working in Liaoning, who pocket 4000 yuan tax-free each month.

But many foreigners businessmen and enterprises are watching this with interest as most of their employees are Chinese.

(Source:Liaoshen Evening News)