On The Evolution And Reflection Of The Contemporary Chinese Individual Income Tax Law

Individual income tax occupies an important position in modern tax system. It is the principal part in the categories of taxes of the overwhelming majority developed countries and be the main source of many developing countries'financial revenue. Individual income taxes'various functions were put into the practice of macro-control extensively. In our country, the function of individual income tax is also very important, it become the forth major category of taxes just after value added tax, enterprise income tax and business tax. With the economic blooming, the individual income tax law system in operation can not adapt the development of economy, and it need to be solved by the revolution of individual income tax law system. This paper is just review the history of Chinese individual income tax system development under such background. The substance of"Income tax for salary and reward"which is listed in the important implementation of tax policy announced by the State Council in 1950 is the categories of individual income taxes. Up to the 1^st September 1980, in order to fit to the policy of enliven the inter market and open to the foreigner, the State Council adopted and announce the Individual income tax law of the People's Republic of China, it indicated the official establishment of our individual income taxation. The decision of revision of individual income tax law of P.R.C which was adopted and announce by the forth meeting of the eighth Standing Committee of the NPC had changed the simultaneous exiting situation in terms of"individual income tax","urban and rural area enterprise taxation", and"individual income adjustment tax"and combined the tax of individual foreigners, Chinese civil and private business man into the individual income tax law. The law adjusts the tax items and tax exemption items again. And it formulates the standard of cost deduction and the tax rate. To apply to the social economic development the law was revised three times in 1999, 2005 and 2007. After the analysis of the complement of individual income tax the reason of its evolution was concluded by the investigation of economic development, culture merge, government function and law consciousness. Later this paper introduces the evolution of the concern law systems and the individual income tax law history in western developed countries, i.e. U.S.A., British. And it also contrasts and analysis the deference between China and foreign countries. At last, after the reconsideration of the current individual income tax law system of our country, the paper obtains the result that the tax law pushes the economic development, society harmonious, development of the technology; demonstration the abuses which happened in the evolution of the law; elaboration the abuses occurred in terms of the formulate of civilization ID, the taxation levy range, expense deduction and the way of tax revenue collection. The paper appointed the suggestion to complement the individual income tax law: to formulate of civilization, to enlarge the tax items, to decent the tax rate, to define a reasonable deduction policy, to establish personal incoming control system.Finally, I hope this paper do help to consummate the law system of the individual income tax in China.