Personal Taxes

China decreased personal revenue tax for fogeys of youngsters underneath 3

New born babies in a hospital in Lanzhou, Gansu Province, China, February 10, 2022. /CFP

New born babies in a hospital in Lanzhou, Gansu Province, China, February 10, 2022. /CFP

China has announced tax-relief policies for parents raising children under 3 years old, according to a State Council circular issued on Monday.

Starting January 1, the individual taxable income of such parents can be reduced by a total of 1,000 yuan ($157) per month for each baby, said the circular.

The move was mentioned in this year’s government work report, which was released during China’s annual legislative sessions in early March.

The deduction can be applied in full by one parent or can be split evenly, added the circular.

The policy follows a decision on improving birth policies to promote long-term and balanced population development, which was adopted by the Communist Party of China Central Committee and the State Council in July last year.

China’s population growth hit a record low last year with 480,000 new births despite the government’s two-child policy in 2016 and third-child policy in 2021, respectively, allowing couples to have more than one kid.

The country is seen a population aging as its population of over 60 years of age increased by more than 3 million from 2020 to 2021.

(With input from Xinhua)

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