China has initiated a process to amend its personal income tax law, a move long anticipated by scholars and the public.

Tuesday's executive meeting of the the State Council, the cabinet, approved in principle the draft of amendments to the law. The meeting also reached a decision to submit the draft to the Standing Committee of the National People's Congress (NPC) for deliberation after making further revisions to it.

"With continuous growth of the national economy and the rising standards of living, some articles of the existing law have fallen behind the times and should be revised," said a participant in the meeting.

Chinese scholars argue that amendments to the law have long been overdue. The existing threshold for individual income tax, 800 yuan (US$98.64), was instituted in September 1980, when the average level of annual wages was no more than 1,459 yuan (US$179.9). By 2003, the level had reached 14,040 yuan (US$1,731.2).

Analysts here say adjusting the threshold would also help to protect the interests of low-income groups of people, as any additional income means a lot to them.

(Xinhua News Agency July 28, 2005)