September 1st, 2011
09:23 AM GMT
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Beijing, China (CNN) – About 60 million people today in China will no longer have to pay income taxes. Beijing raised the minimum levels for taxation, reflecting the growing paychecks – and prices - for average Chinese.

Rather than rejoice, Chinese netizens are howling about new tax regulations that impact couples seeking to marry. More galling is a new interpretation of tax law that says employees must now pay taxes on gifts of seasonal cakes – popular boxes of “mooncakes” traditionally given out for China’s mid-Autumn Festival in September – from their employers.

China raised the minimum income-tax threshold to 3500 yuan (USD 541) after pension, insurance and housing costs are deducted. The minimum taxable income was 2,000 yuan (USD 307). The move is aimed to help lower income families and boost consumption.

But latest version of China’s Marriage Law, which took effect Aug. 13, stirred much controversy across the nation as many complain the new law favors men over women.

According to interpretations of the previous law, property was divided down the middle in divorce cases. Now the new law says property belongs only to the person whose name is on the deed, often the husband – so many Chinese women now fear they’ll lose everything if their name isn’t on the deed.

At the same time, some cities are making it more difficult for couples to add a spouse’s name to the deed. For example, In Nanjing, capital of Southeastern Jiangsu Province, an “adding name tax” was announced last Tuesday invited much criticism. The local Taxation Bureau explained that "if another name is added to the property ownership certificate, that means the property's ownership has changed” and have to pay a tax equal to 3% of the house’s value. Cities like Chengdu, Wuhan and Qingdao have similar laws.

According to local press reports, the “adding name tax” is a cause of conflict at home; for those who have just got married and are going through purchasing processes, the sudden change of regulation has brought confusion and anger.

A commentary in state-run media said the new law demonstrates how the privatization of property is gaining priority in China, bringing significant changes in legal development and challenges to the public.

Meanwhile, a report in Beijing’s Legal Mirror newspaper raised a national controversy when it said employees need to pay taxes for the mooncakes handed out by employers this month as an “in-kind benefit.”

The report angered netizens. “Mooncake Tax” quickly became a popular phrase on Sina Weibo, China’s equivalent of Twitter. One posted survey on the tax generated 20,000 responses, with 92% opposing.

Wrote @Jiazi: “Adding name tax, moon cake tax. Can some expert tell us, compared to the feudalism society in ancient China where the taxes were more horrifying than a tiger, are we paying more taxes or less now?”

“Laws are always targeting the poor people. Some people spend more than ten thousands on a single meal without paying taxes,” wrote @UFO29082030. “But the poor people need to pay tax for just a few moon cakes. Haven’t the moon cakes makers paid taxes already?”

“I’m wondering, for those government officials, are they paying tax for the government cars or petrol? Are they paying taxes for their business tour in China and around the world?” added @Troubleyouxi.

CNN’s Xiaoni Chen, Tian Shao and Haolan Hong contributed to this report

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Filed under: BusinessChina


soundoff (32 Responses)
  1. Nick Kellingley

    The moon cake tax does seem a bit harsh, it's one of those things that employers feel obligated to do out of social convention and of course while they may be expensive to buy, they aren't actually worth very much either...

    September 1, 2011 at 9:45 am |
  2. Indie

    A classi case of from the left pocket to the right. So the minimum taxable income has been raised, but any loss in tax revenues is comprensated by other various new taxes. In the end, you still pay the same amount, if not more taxes a year. But China isn't the only Asian country to practise this, and we find examples whereby state-own monopolies only need to up prices to make up for any loss in revenue from tax cuts.

    September 1, 2011 at 11:24 am |
  3. Aurelius1947

    I always thought the US government should have taxed the sale of donuts in the US, whether the Tea Baggers like it or not!

    September 1, 2011 at 1:07 pm |
  4. coder

    Wow – it seems that all governments are using their citizens as tax slaves
    Since corporations are people too – couldnt they bare most of the tax burden – being that they own the government anyways – in other words, let governments and corporations play the greed game and leave the citizens to being human

    September 1, 2011 at 1:38 pm |
  5. r_a10013

    It is clear to me that the Obama administration is fashioning many of their programs and social disruption after the Chinese...

    September 1, 2011 at 2:49 pm |
  6. dave, ca

    r_a10013- who then do you think GWB fashioned his programs and destruction of the USA after? Hitler? Bet you kept your mouth shut through that entire joke of an administration.

    September 1, 2011 at 4:07 pm |
  7. thetrureal

    China has and is an exploited labour country where people work near slave conditions and pay so this is good news for the slaves and also it is good to see China taxing their wealthier people so to get out of the extreme capitalism that takes from the majority to feed the ruling minority like in western countries.

    September 1, 2011 at 4:26 pm |
  8. joe

    what is a "netizens" spell check before you post

    September 1, 2011 at 5:46 pm |
  9. goldenne5

    If you want to learn the latest about doing business with China, there is a conference, China Leaders Forum 2011, "How American Companies can Plug Into The Chinese Rocket-Propelled Economy", October 7 in New York, that will examine the challenges facing American companies that want to grow and expand their business in China and the opportunities to find Chinese investment partners that can provide a much-needed capital injection while opening the Chinese market. More info: http://www.ChinaLeadersForum com

    September 1, 2011 at 5:56 pm |
  10. Neil Cassidy

    China's is an authoritarian government that creates or changes "laws" according to powerful individuals' whims. There are no checks & balances. The mooncake tax could have been created because someone with a connection to a high-ranking official has a personal vendetta against a mooncake manufacturer. That's how random it is, and how obnoxious it is here in China.

    September 1, 2011 at 8:41 pm |
  11. Kyle H. Davis

    It really isn't having that much of an effect on people here. Tax evasion is more prevalent than paying taxes. And even those who THINK they are paying income taxes, are actually not. Corruption is rampant in the business sector here – companies will claim to be paying the persons taxes, but won't be.

    What made me laugh was this line "A commentary in state-run media said the new law demonstrates how the privatization of property is gaining priority in China"... there IS NO "privatization of property" in China. I don't know what in the world they can be referring to. Having a deed does not actually entitle you to any land in China, it is a LEASE deed, in which the government can take the land from you at its discretion.

    To be honest, I think the change in law is a step in the right direction for the rights of men. Prior to this, the woman got half of everything, no matter what. Understanding that, in Chinese culture, the purchase of a home (by the man) is pretty much a prerequisite to marriage, and that women are in the workplace even more so than in the west... Why shouldn't the man be able to recoup his money, or keep what he worked for (or his family worked for)?

    The idea that Chinese women are "subservient Asian housewives" is way off the mark, and has been for nearly a century. To say that the woman deserves half of the property that the man has purchased prior to marriage, simply out of marriage vows, is ridiculous.

    September 2, 2011 at 12:24 am |
  12. yichun

    YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!YOUR NEWS IS WRONG!, it should to be all property before marriage was divided down the middle in divorce cases. Now the new law says these properties belongs only to the person whose name is on the deed, often the husband – so many Chinese women now fear they’ll lose everything if their name isn’t on the deed

    September 2, 2011 at 12:41 am |
  13. DSK

    From a very cynical point of view, the new marriage law makes the good old "bang and ditch" by rich men very convenient even under a proof of marriage.

    September 2, 2011 at 2:26 am |
  14. greg

    yichun, out of curiosity, what is wrong in the article?
    you write 'it should to be all property before marriage was divided down the middle in divorce cases.'
    do you mean it actually is like that or it should be like that according to your own morals?

    September 2, 2011 at 3:06 am |
  15. lin

    The more common cases in China now is the husband or his family paid the house downpayment and couple will pay the mortgage together after married. But still the name on the deed is under man's. So under this circumstance why should not the women deserve to add her name one the deed or get at least half after dirvoce. However based on the new law, only if the women can prove the evdience she does pay mortgage together, she would possible to get proper COMPENSATION after divorce. So what if she can't provide any, or the men claim he has nothing to pay the compensation?! Also, while the women dedicate all herself to the family as well as have to face the cruel competition in her career, turns out the man having affair out there somewhere, spending all the money on the other women, who would protect those wives rights?! The new law definately will not!

    September 2, 2011 at 3:08 am |
  16. Kyle H. Davis

    yichun: Umm... unless I am mistaken, that is EXACTLY what the story says. How is it wrong, and you are right?

    September 2, 2011 at 3:08 am |
  17. greg

    and I know from own experience, that chinese women in our times will always and only commit if they believe there is, at some point in time, real estate property in for them personally. there's no romance without the prospect of property. and there is nothing wrong with that in chinese culture as materialism and romance do mix in asian values.

    September 2, 2011 at 3:13 am |
  18. get_lost_China

    I'm a local Chinese and I read CNN and BBC very often, unfortunately, the vedios in CNN are blocked always in China. There are a lot of people especially the young guys disatisfied what the government does it now, but there is no channel to appeal. No official will listen or care, relation and bribes are essential elements in China.

    September 2, 2011 at 3:27 am |
  19. chris

    the fact is that people will always get screwed if they rely on the government, the judicial system or any officially instituted scheme (retirement, health insurance, estate planning). all you end up with is ambiguity, frustration and horrendous lawyer's fees. it true for china as well as e.g. in highly regulated germany (where you have less room to maneuver). you need to take precautions and arrangements in place before any crisis hits you, especially so if you have some wealth. there no need to complain it would not work or how fair or unfair it is. there is no general recipe for it, only smarts will do.

    September 2, 2011 at 4:01 am |
  20. Chris Wang

    I bet you guys could have plenty taunting and sinophobe comments deriving from just a little mooncake tax.
    Oh,you don't know how expensive the mooncakes were,it's not wired that so much distortions and contumelies under severe doltish.The tax aims to depriciate mooncakes and their lavish envelopes,not your stupid comments claiming some rediculous and babish hatred that make me laugh and laugh and laugh.
    As a freedom and deify American,of course you just can't know what mooncakes mean to us and I don't want to explain to detractors either.
    I please you don't put vicious and inconceivable labels on China.One old Chinese aphorism states,banes come from words.
    To some purported local Chinese,I don't care whether you just don't want to fight for China or you are lying in your America daddy's arms,but don't write comment as you are represting us,it makes me nausea.
    By the way,may CNN forbid my IP again.
    Pity.

    September 2, 2011 at 6:07 am |
  21. greg

    Chris Wang: hey you would make a good censor.

    September 2, 2011 at 6:50 am |
  22. André

    It is immoral to tax a person's income. That's like punishing hard work. Only taxing what you spend is justifiable.

    September 2, 2011 at 8:01 pm |
  23. Beefburger

    China sounds like it isn't much different from the US now. Tax the poor so that the rich can get richer.

    September 3, 2011 at 2:19 am |
  24. Beefburger

    @ Kyle H. Davis At least with a "lease deed" they are being honest about what it is. It is the same here but we pretend that we actually own property, try not paying your property tax and you will see with a quickness who really owns the property. Or your family can have owned a property for hundreds of years but any authority from a city up can claim "immenent domain" and pay you a tiny percent of the actual value and just take the property like you were never there just so they can give it to a private company to build a strip mall or a condominium, all i n the intrest of "serving the greater good" (MY A$$!).

    September 3, 2011 at 2:26 am |
  25. Beefburger

    Adendum: Also, you can only build what they allow you to on a property, you cannot build a house on what is "zoned" for a farm or a business. To change the "zoning permit" could take years and a LOT of city council meetings.

    September 3, 2011 at 2:30 am |
  26. LIONET

    I think Chinese govenment are misunderstanding the true meaning of taxation. Tax should be posed on the value-added issues both in business and in terms of personal wealth. Using these taxes, the government could make more achievements on infrastructure and social welfare. It could also bridge the gap between the rich and the poor while reaching the so called "hamornious society". But unfutunitely, these "adding name tax" and "mooncake tax" as well as the "real estate taxes" have nothing to do with value-adding. So it is just like roberring money from ordinary people. Also, it is hard for us to believe that these taxes could be used for imporving social welfare and balance the society.

    September 3, 2011 at 2:06 pm |
  27. xchen

    Well, I read another news that MOF China announced on Sep. 1st that "couples to add a spouse’s name to the deed don't need to pay tax". I don't know why this is contrary to the news above that : "The local Taxation Bureau explained that "if another name is added to the property ownership certificate, that means the property's ownership has changed” and have to pay a tax equal to 3% of the house’s value."

    September 3, 2011 at 4:23 pm |
  28. Robert Brewster Jr.

    Chris Wang, you really should stop relying on the Google translator, it makes you sound like a party censor. You commie types should lighten up a bit, there will always be criticism of anything from some people. You can't please everybody, didn't you know that?

    September 3, 2011 at 11:23 pm |
  29. Jim

    uh, China is a communist dictatorship... might want to keep that in mind.

    September 4, 2011 at 7:38 pm |
  30. Chinaren

    You don't buy a house here. Houses (well, mostly apartments) in China are still only 'rented' from the state. You have a seventy year lease at the moment before the govt gets it back. I believe this will change soon, as many people are buying apartments now.

    My Living in China blog: http://Chinarensblog.com

    As for mooncakes. I dislike them already!

    September 5, 2011 at 12:02 am |
  31. Trailblazer

    1979 Saddam Hussein
    1969 Muammar Gadhafi
    1959 Fidel Castro
    1949 i am looking forward to

    September 5, 2011 at 3:34 am |
  32. icons pack

    Also what in that case it is necessary to do?

    October 4, 2012 at 7:24 pm |

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