A New Round of Fiscal and Tax Reform: A Discussion on Implementing Uniform Taxation on Labor Income

Abstract

The "Decision on Further Deepening Comprehensive Reforms and Accelerating the Process of Chinese-style Modernization," which was smoothly reviewed and approved at the government conference, "Improving the personal income tax system that combines comprehensive and categorical taxation... and implementing uniform taxation on labor income." This clarifies the direction of personal income tax reform. Based on an analysis and comparison of tax burdens and tax base data for different tax items of personal income tax from 2018 to 2022, this article finds significant differences in tax burdens between business income and other labor income. It analyzes the necessity of implementing uniform taxation on labor income from the principles of tax fairness and tax efficiency and, on this basis, discusses the reform direction and proposes suggestions.