Discussion On Improving China's Personal Income Tax System

Individual Income Tax (IIT) was aroused in British by the end of 18 century. After more than 200 years development, it becomes a popular tax used among worldwide countries, not only the main tax in western developed countries with market economy, but also the essential tax item within developing countries. Individual Income Tax in developing countries has become an important category of taxes nowadays, and its social significance and financial sense rising day by day.Compare with the developed countries, IIT is levied in China in a late manner. After the opening up to the outside world, China set up a system of IIT, and made some innovations. Now IIT act as an important tax item, along with high-speed development of social market economy in present stage in China and continuously development of tax system innovation, IIT has been acting a obviously role in adjusting income allocation and gains comprehensive attention of community. However, the short term of theoretical research and practice in IIT in China, as well as diversification of personal income, makes the management of IIT more and more complex and difficult. At the same time, the principle of impartially adjusting income allocation has been doubted which results to imminent developing and improvement for IIT. So, this paper research the problem at the angle of the formation of IIT, IIT rate and levy standard, according to the comparative study of the cases in other counties, in order to provides realistic help for meliorating IIT management, enhancing fiscal income.The paper based on theoretical research and practical problem analysis, combining domestic and international comparison research method of combining the personal income tax system, try to improve and solve social fairness problem.This paper is divided into five chapters. The first chapter includes the oriental analyzes of the topic, the research content and the innovation points in the article. The chapter is in order to clear the research direction of the article. The second chapter analyzes history and present situation of China, theoretically expounds the objective, function, component elements of IIT and points out its imperfection and short comings. The third part lists the mainly problems exist in our country. The fourth part refers to the theories and the successful experiences of individual income system reform in developed countries. Finally, in fifth part the author set forth some ideas and suggestions about the improvement of, the tax mode, cost deduction, tax rate and levying system in China.