Middle Market Group Chairman Dong Mingju: "Double the Income Tax Base and Raise the Top Tax Rate to 55%"

"Improve Spending Capacity by Doubling Income Tax Threshold...But the Wealthy Must Pay More Taxes"

Deng Mingzhu, Chairman of China Street Electric

[Asia Economy Reporter Kim Hyunjung] Dong Mingzhu, a prominent female entrepreneur in China and vice chairperson of the National People's Congress (NPC), who is also the chairwoman of Gree Group, has expressed the opinion that China's income tax threshold should be raised to 10,000 yuan (1.89 million KRW), double the current level.

On the 21st, Hong Kong's South China Morning Post reported that Chairwoman Dong recently made these remarks on China's state-run CCTV. Dong stated, "They say consumption is sluggish, but how can people spend more without income?" She argued that to improve consumption capacity, the income tax threshold should be raised to 10,000 yuan, twice the current level. Gree Group is an air conditioner manufacturer, and Dong is known locally as 'Tieliangzi' (鐵娘子, Iron Lady), consistently ranking among the world's most influential female entrepreneurs every year.

At the same time, she expressed the opinion that the high-income group, as classified by this threshold, should pay more income tax than currently. She explained, "If income is high, taxes should be higher," and suggested raising the top income tax rate from the current 45% to 50-55%. China also implements a progressive income tax system, with rates ranging from 3% to 45%.

Despite recording growth during the COVID-19 pandemic, the Chinese economy is under significant downward pressure due to sluggish consumption, slowing income growth, and weak employment.

Dong has previously advocated for similar tax reforms and submitted a proposal containing these ideas to the NPC last year. According to SCMP, this idea is gaining momentum in line with Chinese President Xi Jinping's "common prosperity" plan.

However, fiscal experts have expressed concerns about Dong's proposals. SCMP reported, "Some fiscal experts pointed out that tax reforms could hinder the government's efforts to expand the tax base, improve the investment environment, and attract internationally skilled talent."

Meanwhile, the Chinese government announced last December that it would extend some personal income tax relief measures to stimulate consumption. However, these tax cuts were expected to show regressivity, benefiting high-income earners more.

This content was produced with the assistance of AI translation services.