The State Council passed proposals to raise the threshold of personal income tax on Wednesday. Following the talks, the plan will be delivered to the National People's Congress for review. Should it come into effect, the move will benefit China's middle and lower income groups.

During his on-line chat with Chinese netizens last Sunday, Premier Wen unveiled the government's plan to raise the personal tax threshold for the first time since the global financial crisis of 2008.

Experts predict the threshold should rise from 2 to 3 thousand yuan.

Should it take effect, those earning salaries of around 6 thousand yuan per month should pay around 150 yuan less in tax.

Unsurprisingly, the proposal is proving popular.

Mr. Liang, Guangxi resident said "It's a good idea. If the threshold rises I can save more money. Let the richer guys pay more tax."

Mr. Xu, Guangxi resident said "The financial burden is becoming much heavier. Prices are rising, so I think it's a good idea to raise the threshold."

Experts say the plan will benefit those in the lower and middle income brackets the most.

Yao Hua, Vice Director of Guangxi Academy of Social Sciences said "Most graduates, migrant workers and even white collar workers earn 2 to 3 thousand yuan a month. So the current threshold is too tough for them. If we lift the threshold, lower income residents will feel less pressure. And if they have more money in hand, domestic consumption will grow."

Some people have put forward their own suggestions on income tax reforms.

Mr. Zhong, Guangxi resident said "I think the tax threshold should be flexible, and based on the total family income. For example, if the husband earns high wages, but his wife earns nothing, that family has to pay comparatively higher tax, compared to a couple who are both working, but earning less."

Mr. Deng, Guangxi Resident said "I think the government needs to improve its supervision of the tax system. Some people make a high income running their own company, and can find ways of avoiding tax."

Most people think that whatever shape the income tax reforms finally take, they hope the government will strike the right balance between rich and poor, allowing all residents to enjoy the benefit of the changes.

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