Study On China’s Personal Income Tax Loss Of Function

Personal income tax is an important tax in the world. It also occupies an important position in China’s tax revenue. At the beginning of twentieth Century, the personal income tax has been introduced to China. Because of different national conditions, it has different functional positioning. This article thinks that tax’s functions in raising fiscal incoriie and adjusting income distribution are collaborative. But at present the two functions are weakened, and cause many problems and social concerns. Based in the existing personal income tax in our country, the government adjusted it many times, such as raising tax exemption, but having little effect. Because the loss of tax from the high income group is serious, thus weakening the personal income tax’s functions in raising fiscal income and adjusting income distribution.The first part of this paper is the introduction. This part mainly introduces the researching background and significance, the domestic and foreign research results, the innovation and shortage of this paper. Under the increasing gap of income in our country, personal income tax is difficult to play its due function. After many reforms, the effect is not ideal. Thus it has important theoretical and practical significance to study on the cause of function loss and practicable measures. After reading research by scholars at home and abroad, I hope to put forward some feasible suggestions.The second part is the present situation of personal income tax’s function loss. On the side, the personal income tax in China is growing very fast, but when compared with developed countries,) the proportion is low. On the other side, this is related to the level of economic development, China’s income level, the ability of tax collection etc. Because the loss Jof China’s personal income tax is serious. And many high income earners use loopholes to evade tax, and the tax administration is ineffective, resulting in the loss of function.The third part introduces the reason of loss of tax function in China. There are mainly two categories, namely the problem of system and implementation issues. In institutional problem, although the provisions of design and exemption tax rate has a certain degree of influence, but it is more critical for taxation mode, tax regulations. The two parts has carried on the detailed elaboration. In the implementation issues, due to China’s tax authority’s internal and external causes, leading to inefficient and unfair.The fourth part discusses the existing problems that tax administration faces, namely from taxpayers, tax authorities, tax environment and tax system. We can see that the system needs to depend on the administration to implement. While tax authority due to internal and external causes, lead to huge tax loss and unfair tax burden.The fifth part is the introduction of international experience. This paper introduces the American and Australia’s tax system and tax collection system, hoping to get some experiences and put forward some suggestions for the construction of individual income tax in China.The sixth part proposes some suggestions. Through the analysis above, we can see only under the guidance of tax system, strengthening tax collection and management to prevent the loss of tax revenue, can we make it function better.