China's leading economist Zhou Qiren suggested today that China needs to lower its individual tax threshold to stimulate domestic consumption.
That means the Chinese Government will do that!
Zhou is the official "independent" economic commentator in China and his statements often "prove" that the Government is listening to independent opinions. He called for "aggressive tax-reduction measures" at corporate and personal levels to stimulate downward domestic demand brought by worsening external economic surroundings.
He hinted that the National People's Congress had already reached the consensus to do that (increase the benchmark of individual income taxation) If he "hints" it is a done deal!
Zhou from Peking University was speaking to 500 businessmen today at a management forum in Beijing. So what does that mean....My guess is the income earned before you pay individual tax will be tripled ie pay tax now on all income over 2000 yuan but after reforms only on income over 6000-8000yuan. And VAT 17% down to 6%. And that is a serious stimulus. So let's see!!
I source my information from internal Chinese news reports passed on to me by English speaking contacts.These reports sometimes appear on Western news wires.