Concerning On The Reform Of Personal Income Tax System

Personal income tax, as a direct tax, is on individuals to obtain the incomelevy. Britain is the first country to levy personal income tax in1799in order toalleviate the financial expenditure increase because of the war. The personal incometax has gone through200years of development, became a worldwide levy tax from thevery beginning of a small tax.Since the introduction of personal income tax in1980, China has experienced aprocess from scratch. The personal income tax has become China’s fourth largest tax interms of increasing financial revenue or played an important role in adjusting revenuedistribution. China’s revenue of personal income tax increased from7.267billion in1994to483.717billion in2010, the proportion of personal income tax to total taxrevenue rose from1.4%to6.6%. The reform of China’s individual income tax systemhas improved continually, From the party’s Third Plenum, the simplified taxationsystem,” tax base, low tax rates, stricter tax collection “established as the direction ofthe reform of China’s personal income tax. Personal income tax has become one oftaxes to our country can not be replaced and we should give full play to itsfunctions. Personal income tax is a kind of the direct tax of the residents, directlyrelated to the interests of the citizens; the personal income tax has become the mostconcerned tax to the residents. However, as China’s economy is growing, changing thecurrent social situation in the running process of the personal income tax system hasgradually developed into a problem. Individual Income Tax forms can no longer besuitable for China’s economic development, the gap between the rich and the poor isalso more significant.Based on the current personal income tax system, the use of theory with practicelists the deficiencies of China’s individual income tax system, drawing on theexperience of individual income tax system from other countries, learn more suited to the development of China’s personal income tax measures proposed suitable for thedevelopment of China’s personal income tax suggestions.The second part of the individual income tax was introduced the evolution anddevelopment, this article will divided the development of individual income tax intothree stages, beginning stage, restoration period and high speed development stage,and also discussed the different characteristics of each stage, the development of ourcountry economy and the influence on people’s lives.The third part is mainly analyzed by individual income tax system mode selection,the expense deduction standard, the tax rate structures and four aspects of taxcollection administration of China’s individual income tax and the analysis of existingproblems, and from our individual income tax and the tax agency and tax system itselftaxpayer (tax participants) two reasons in this paper.The fourth part through the introduction of the personal income tax system in fourcountries of the United States, Japan, Germany, India, through the analysis of the taxsystem, China can learn from them and adapt the experience to the development ofChina’s national conditions, individual income tax system recommendations.The last part of the problems for the personal income tax in China, learning from thesuccess of the foreign individual income tax system, a tentative views on tax reformfor China’s personal income tax from the tax model, the cost of the standard deduction,the tax rate structure and collection mechanism four negative.