China raises the threshold for the payment of personal income tax from today, aiding consumption in the world’s second-biggest economy as a global slowdown threatens demand for exports.
The level of income rises to 3,500 yuan ($549) per month from 2,000 yuan, according to a statement from the standing committee of the National People’s Congress, dated June 30 and posted on the website of the State Administration of Taxation.
Rising domestic demand may help China weather weakness in the global economy after an index of export orders slid in a manufacturing survey released today. JPMorgan Chase & Co. said last month that policy makers can do more to boost consumption to shield the nation from external shocks.
“In the event of another global downturn, the government may support households through more aggressive pro-consumption measures,” Jing Ulrich, JPMorgan’s chairman of global markets, China, said last month.