Although the threshold for personal income tax was raised from 800 yuan to 1,600 yuan per month from Jan. 1 last year, revenue from personal income tax revenue climbed 17.1 percent year-on-year to hit a record 245.23 billion yuan last year. This represents a growth rate standing at 11.8 percentage points higher than 2005.

Xie attributed the rapid growth to rising incomes fueled by the booming national economy and tighter enforcement of collection rules.

He said the SAT would fully employ its tax leverages to narrow the widening gap between rich and poor thus contributing more to China's social harmony and common prosperity.

Tax revenue from medium and low income earners grew by 8.4 percent last year while the collection from high income earners surged 33.9 percent.

Xie outlined SAT measures taken to ensure "fair taxation" last year, citing the regulation on taxing home sales.

Under the regulation, people purchasing expensive homes such as villas and townhouses and sell them more than five years after the purchase must pay tax on the income while those who buy affordable apartments are exempted.

The levy of consumption tax on luxury goods was another method of fair taxation.

China began levying higher customs duties on luxury items brought by travelers or mailed to China from Jan. 1 this year, with the rate on golf clubs and expensive watches tripling to 30 percent mirroring the 20 to percent rise for cosmetics.

The move fits in well with the levy of consumption tax on luxury goods such as luxury watches, golf clubs, yachts, and wooden floor panels since April last year.

"Taxation is a major revenue redistribution tool. One of our top priorities this year is to use tax policies to guide consumption, facilitate energy conservation and environmental protection and to uphold fairness and social justice," Xie said.

(Xinhua News Agency January 25, 2007)