Research On Perfecting The Special Additional Deduction System Of Personal Income Tax In China

In the process of economic restructuring,our country’s economy is also gradually and steadily developing.The income level of people is constantly improving,and the gap between rich and poor is widening.The role of personal income tax is to regulate income distribution,which plays an important role in the development of the entire society.The Personal Income Tax Law was amended for the seventh time in 2018(referred to as the "Personal Income Tax Law").This time,the revised "Personal Income Tax Law" increased the basic withholding amount and added six special additional deductions,namely: children’s education,continuing education,housing rent,housing loan interest,serious illness medical treatment,and supporting the elderly,all of which are important issues related to people’s livelihood.On March 28,2022,the State Council issued the "Notice on the Establishment of Special Additional Deductions for Personal Income Tax in the Care of Infants and Young Children under the Age of 3",which supplemented the special additional deductions for personal income tax.This revision has played a catalytic role in the economy and more fully reflected tax fairness.At the same time,we have also seen many substantive innovations: improving the basic expense deduction standards,combining comprehensive and classified tax systems,and optimizing the tax rate structure.These all highlight the characteristics of the synchronized development of the personal income tax system with the times,allowing every taxpayer to actively participate in,and allowing the personal tax reform to play a greater role.The special additional deduction is an important breakthrough in this reform,which has been implemented for more than four years.It not only takes into account individual differences,but also reflects the fairness of national tax policies.The reform of individual income tax reflects the strong expectation of Chinese residents to deduct their actual living costs,indicating that the focus of its reform is no longer just to adjust income distribution and narrow the income gap,but rather to pay more attention to improving people’s livelihoods and promoting social equity.However,at the same time,due to lack of experience,some problems have also arisen:the threshold of deduction standards is too high,the deduction items are single and incomplete,and the tax collection and management are not perfect.This article will start from the background of the introduction of the system of special additional deductions for personal income tax,and elaborate on relevant theories such as the principle of tax legality,the principle of tax fairness,the principle of taxation according to capacity,and the theory of income distribution.The content and deduction items of special additional deductions will be explained.On this basis,by analyzing the current development situation in China,starting from reality,identifying the problems,and combining with the specific practices and experiences of the United States,Britain,and Japan,selecting the advantages that are suitable for the special additional deduction of personal income tax in China and summarizing them for reference,suggestions are proposed for the construction of the special additional deduction system in China.Firstly,improve the specific content of special additional deductions such as continuing education,serious illness medical treatment,supporting the elderly,and housing loan interest;Secondly,add special additional deductions that meet actual needs,such as additional deductions for disabled individuals,widows and widows,and deductions for losses caused by accidents;Thirdly,adopting diversified deduction standards can make appropriate adjustments based on regional differences;Fourthly,establish a flexible adjustment mechanism,which can be dynamically adjusted through the resident consumption index based on relevant foreign experiences;Fifth,establish a taxation model based on the household as a unit;Sixth,establish a scientific and efficient tax management mechanism,and combine it with the construction of the fourth phase of the Golden Tax to build a national unified information tax management platform.Through in-depth research on the special additional deduction system,we hope to provide some useful perspectives and ideas for the development direction of China’s personal income tax reform,so that the construction of China’s tax legal system can take it to a higher level,laying the foundation for comprehensively adhering to the rule of law and promoting the construction of the rule of law in China.