China passes laws to promote private business

China took a step Thursday toward closing the expansive divide between rich and poor by passing legislation to lighten the tax burden on the country's least fortunate. China's parliament announced the passage of a package of newly revised economic laws meant to promote the growth of private business and agreed to cut income taxes on the country's poorest workers.

The measures come weeks after the ruling Communist Party issued a new long-term economic plan that promised to maintain fast growth and called for steps to narrow China's politically explosive gap in wealth.

The government has warned that the growing gap could lead to serious social unrest if it isn't addressed. President Hu Jintao and other leaders have pledged to promote "social fairness" in a bid to maintain harmony across income lines, the AP reports.

Extensive revisions to China's corporation law, securities law and income tax law were all passed Thursday by the National People's Congress, said several spokesmen who crafted the changes at a press conference.

Chinese who make less than 1,600 yuan a month (US$198; Ђ165) will no longer need to pay income tax, up from the previous cutoff point of 800 yuan (US$98; Ђ80), said Lou Jiwei, head of the State Council Financial and Banking Office.

Annual incomes in China's booming eastern cities average more than US$1,000 (Ђ700) per person while rural incomes linger at around US$370 (Ђ302) per year.

The tax cut will result in a loss of about 28 billion yuan (US$3.5 billion; Ђ2.9 billion) in fiscal revenue annually, Lou said. The securities legislation includes new measures to improve protections for the rights of small private investors in Chinese companies, said Zhou Zhengqing, deputy head of the NPC Finance and Economic Committee. A.M.

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Author`s name: Editorial Team