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China"s top legislature is revising the personal income tax code in a sweeping overhaul of the tax system. Specific personal income tax changes that aim to reduce taxpayer burdens and boost consumption are expected after the proposed changes receive regulatory approval.

The threshold at which people pay personal income tax is expected to be lifted to 5,000 yuan ($772) a month from the current 3,500 yuan, according to the draft amendment on Individual Income Tax Law. The draft was submitted to the bimonthly session of China"s legislative body, the Standing Committee of the National People"s Congress, for its first discussion on Tuesday.

A draft revision usually receives three readings at the top legislature before adoption. The move is expected to increase residents" income and enhance consumption power because it reduces the tax burden for individual taxpayers, especially people of low to medium income, Finance Minister Liu Kun wrote in the draft.

A rough calculation shows an individual with 10,000 yuan in monthly income would pay 255 yuan less per month.

The revision is the biggest tax overhaul in over two decades and will cover details to further improve tax rate structure and efforts to further lower tax burdens, particularly among low and middle income individuals, according to the draft.

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