Time to review the current tax system
Updated: 2007-12-04 14:42
It would be better to impose less harsh tax on an individual's income. It would cushion the blow of rising prices for daily necessities.
Some experts think the tax on securities investment income would narrow the income gap among the different social groups and check stock market speculation. This policy, I am afraid, may not be easy to achieve.
The common feeling is it would have most impact on the common people rather than the rich.
The rumored rate of 20 percent tax on securities investment income seems to be significant, but the rich can afford it considering the rewards they reap from the stock market.
If they think their securities investments are no longer rewarding following the imposition of the tax they have abundant other investment options.
It would not be the same for the common people.
With more than 135.74 million accounts on the Shenzhen and Shanghai stock exchanges by November 29, the stock market has involved a huge proportion of the population, most of whom are common people of middle or low income. By investing their savings from their modest incomes on the stock market they are looking to increase it.
Their confidence in the market would be severely dented if they have to pay 20 percent on their returns as tax. Probably, they would quit the market, which would dampen development of the capital market.
It is worth stressing that the current taxation system should be revised in such a way that its overall burden is reduced.
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