China to tax high earners heavily
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China's taxation authorities will close loopholes in the collecting of personal income taxes from citizens with high incomes, said the State Administration of Taxation (SAT) on its website.
The main focus will be put on income from the transfer of equity and houses, derived from auctions, interest returns, stock dividends and bonuses.
The SAT has ordered local taxation bureaus to strengthen cooperation with other departments, such as administrations for industry and commerce, to enhance taxation on transfer of equity in non-listed companies and taxation on transfer of equity in listed firms.
Taxation authorities will also make frequent contacts with auction houses to gather information on income derived from auctions and urge auction houses to pay taxes on behalf of income owners.
The income of investors of enterprises that have yielded profits continuously without distributing stock dividend or bonuses will be another focus for SAT
According to studies conducted by the Renmin University, China's income gap has grown over the past few years and its Gini coefficient, a main gauge of income disparity, has long exceeded the international standard for the "security" level of 0.40. The latest data pegged China's Gini coefficient at 0.48.
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