Tax and pensions in China

The Chinese economic miracle is striking. At the same time China steadily builds "srednesrochnoi" society, reducing the tax burden for the population and even abolishing the income tax.

How does the tax system in China, which means with such a huge population to pay pensions and what happens to defaulters, read in our material.

Not so long ago the world spoke of a "Chinese miracle". A country with a huge population demonstrated an unprecedented growth of GDP and industrial production. The once backward state in a few years became the largest aerospace and military power. Hence the high interest of foreign experts who excitedly discuss the "Chinese miracle" and trying to do long-term forecasts on the share of China in the global market.

Ordinary citizens are more interested in the daily life of Chinese, their purchasing power, pensions. Many of the frightening myths about the totalitarian regime of China, a strict system of social rankings. Indeed, the tax system can tell a lot about the lives of the citizens of a particular country. Given the demographic problem of China, the formation of the optimal tax system is very difficult question. Whether so it actually?

"All brilliant — just" — it's not about the Chinese tax system. It consists of about 20 mandatory fees. For comparison, it is better to consider the most important of them. For example, income tax of China. The system by which it is calculated how heavy the burden of the collection for ordinary citizens?

The poorest Chinese are paying the Treasury only three percent of revenue, while the next social group to ten percent. More wealthy citizens given to the Treasury of 15 percent of income. Income tax the most wealthy Chinese is 20 percent. The question is, who in China is considered poor. Because the low tax rate may adversely affect the Treasury. As is the situation with taxes?

Economists of almost all countries expect a kind of poverty line. It is believed that the citizens of this social status are very poorly paid. In China a 3 percent income tax paid by the citizens receiving up to five thousand yuan. Among the working citizens of China are poor slightly less than half.

The Chinese state has developed an effective system of tax collection. The richest taxpayers are willing to pay into the Treasury the appropriate share of income. Despite the fact that the middle Kingdom is a leader in all economic indicators, taxes here are lower than in the EU. So wealthy Chinese are more profitable to pay taxes and wants to earn even more.

We all know that China is the most populous country with a huge population. The state for years trying to contain the population growth. Program to encourage the birth of only one child, led to changes in the demographic situation. The proportion of the population of retirement age. Which, of course, affected the pension system.

The country's budget with multi-billion population is not able alone to provide all pensioners. Gentle system of taxation encourages working veterans. The contributions of young taxpayers is unable to feed a rapidly aging population. Many countries have independent retirement savings. But in China this system is not stuck.

The Chinese pension consists of two parts accumulated contributions. The state assumes the provision of basic (social) parts. The so-called pension "old-age" is paid to citizens who have reached retirement age and had worked in China for at least 15 years. The social pension can cover only a small portion of human needs. Therefore, employers and employees are also subject to pension tax. For the first installment is 20 percent of the official salary of employees for the second – eight percent.

The global financial crisis has affected China, as well as the rest of the world. The Chinese, like consumers of many countries also pay value added tax when making a purchase. In contrast to Russian VAT, which is growing from year to year, and 20 percent Chinese VAT on the contrary, becomes smaller. Today in China buyers pay 16 percent tax on consumption.

The Chinese economy is going through hard times and shows a more restrained performance than a few years earlier. The government has cut VAT to motivate people to buy Chinese goods. Thus, the Chinese government supports domestic producers. Reducing the tax burden at a difficult time unloads large and small businesses, helps citizens maintain an acceptable standard of living.

The logic of the Chinese state is worthy of respect. Demonstrating to the world a miracle of economic take-off, China continues to hold the lead in many industries and remains the main competitor of leading brands. This not only promotes a balanced internal policy, and centuries-old traditions and hardworking nation.