December 20 2022

China to Tighten Tax Regulation and Supervision over High-income Earners

The Chinese government released on December 14, 2022 the Guidelines on Expanding Domestic Demand (2022-2035). The Guidelines rolled out 27 measures in eight aspects for the key tasks of fostering a holistic domestic demand system, forming a strong domestic market, and smoothing domestic economic circulation.

The Guidelines called for expanding the roles of financial and tax systems in regulating income distribution, urging to improve the system of levying tax directly and the individual income tax system, and strengthen the tax regulation and supervision over high-income earners. It also stressed the need to improve the transfer payment system to increase transfer payments to the regions that lag behind in development, increase allocation of funds to the areas that concern people's livelihoods in an orderly manner, optimize the structure of education expenditure, elevate traditional consumption, promote healthy development of the catering industry, and take measures to eliminate food wastes.