The Research On The Deduction Of Child-Rearing Expenses Of Individual Income Tax In China

China’s rate of population growth has been greatly reduced in recent years,and we are faced with the challenges of an aging population,fewer children,and the weak will of women to bear children.The state’s response to these problems was also reflected in the individual income tax system.In 2018,the People’s Republic of China revised its Individual Income Tax Law,which not only increased the basic deduction to 60,000 yuan a year,but also added 6additional special deductions.In March 2022,the State Council issued the Notice of the State Council on the Establishment of Special Additional Deductions for Personal Income Tax for the Care of Children Under 3 Years old.However,the deduction of dependent care expenses in our tax system needs to be improved,the deduction items and the level are still not in place,and these problems need to be perfected.The improvement of the personal income tax deduction standard for dependent care expenses can not only play a practical role in relieving the economic burden of raising families,but also be of great significance to the development of China’s fiscal theory and the construction of the tax system.The purpose of this paper is first to define and combs the relevant concepts,theories,and principles of dependent care expenses deductions and,second,to expound and analyze the current situation and problems of the dependent care expenses deduction system in our country,and argues that the deduction standard fails to account for differences in different family structure and the level of income;lack of deductions for expenses other than family,maternity,and special children’s education and the inflexibility of the adjustment mechanism for the deduction of dependent care expenses.With the above problems in mind,this paper combs the relevant tax deduction systems from dependent care expenses in the United States,Japan and the United kingdom,summarizes the more advanced practices of these countries in dependent care expenses deduction,and advances the following suggestions for reform of the dependent care expenses deduction system in our country: to establish different deduction standards depending on the number of children raised in the family and the number of labor force in the family so as to reduce the problem such as different family structures with the same tax burden;to increase tax credit rebates for low-income groups;to increase the deduction for special groups including people with disabilities,and reducing the additional financial burden on special households;to increase deductions for maternity and other expenses in order to reduce the economic impact of childbirth on the family to raise women’s willingness to bear children,and to establish a dynamic adjustment mechanism linking the deduction for dependent care expenses to the CPI,in order to avoid an inflation-induced increase in the real tax burden on taxpayers and to safeguard their tax rights.