The Study Of The Individual Income Tax System Reformation

Personal income tax is one of the important taxes in the national tax system. On the one hand, it raises revenue for the state; on the other hand, it is also a direct and effective instrument to adjust the distribution of income. Since the first China’s personal income tax law enacted in1980, the Law has experienced five changes in the revenue model, the tax rate structure, the expense deduction method to determine the exemption amount, taxable scope gradually forming. However, due to the personal income tax in China started late, there are still many drawbacks in the role of the tax, the tax system designation, and tax collection.There are some serious deficiencies and shortcoming exits in The current personal income tax system as following:First, the scheduler income tax system and the threshold of the tax is unfair. The scheduler system is not conducive to fair, national standard exemption is also difficult to achieve horizontal equity in the tax burden because it ignores family, area, prices and other factors. Second, the tax rate structure is relatively complex, the rate of wages-salaries income tax distance too much. Third, the wage-earners become the main taxpayer of the personal income tax. Forth, the tax enforcement to the high-income brackets is too weak. The tax collection, management, punishment and incentives to high-income population to pay taxes are unreasonable; high-income group is not clearly defined. The difficulty of these aspects cannot make the personal income tax burden progressive with income levels, and cannot play effective role to regulate the distribution of income, worse to increase the gap between rich and poor, and buried a destabilizing factor to the community.Aiming at these problems, China should learn advanced experiences from international countries to improve personal income tax system in the legislation, which using family as the unit of taxation and reforming the tax collection and management to reduce the special taxpayer. china should strengthen the propaganda; establish a unified personal tax identification number system and a individual income tax collection and management information platform; improve the tax agency practice quality and business level.