Asianfin--The State Taxation Administration has unveiled its 2023 Individual Income Tax (IIT) clearance report, providing valuable insights into the income landscape and employment dynamics in China. While the report contains various highlights, it also reveals crucial details about the income levels of different demographics, showcasing how tax data reflects economic realities. Here are the key findings: The report reveals that over 70% of individuals in China do not pay personal income tax. It highlights that around 67 million people benefited from the “one elderly, one child” special additional deduction policy in 2023. Additionally, it notes that those earning less than 100,000 yuan annually are generally exempt from income tax. Since the tax threshold was raised from 3,500 yuan to 5,000 yuan, the number of income taxpayers plummeted from 157 million to 65.12 million (based on 2022 statistics). From this data, we can infer the following: - Nearly 100 million individuals earn between 3,500 and 5,000 yuan monthly.- Only 65 million people earn more than 5,000 yuan per month.- Over 45 million earn between 5,000 and 10,000 yuan monthly.- Just 20 million people in China earn over 100,000 yuan annually.- Given a total employment population of 720 million, over 600 million people earn less than 3,500 yuan per month. To assess the middle-income demographic, average salaries in first-tier cities provide a useful benchmark. As of mid-2023, the average monthly salaries in major first-tier cities were reported as follows: - Shanghai: 13,490 yuan- Beijing: 15,701 yuan- Guangzhou: 13,193 yuan- Shenzhen: 14,553 yuan This translates to an average monthly salary of approximately 13,000 to 15,000 yuan. The IIT report indicates that "among the remaining less than 30% of actual taxpayers, over 60% are subject to the lowest tax rate of 3%, resulting in minimal tax payments." With around 20 million taxpayers (those earning over 100,000 yuan annually) and over 60% in the lowest tax bracket, it can be estimated that: - Approximately 12 million earn between 100,000 and 150,000 yuan annually.- This suggests that over 8 million individuals in China earn more than 150,000 yuan per year. The report indicates that high-income earners, defined as those with annual incomes exceeding 1 million yuan, make up about 1% of total filers. This group, however, contributes more than 50% of the total income tax revenue. Assuming there are 67 million tax filers, it is estimated that around 670,000 individuals earn over 1 million yuan annually. Combining this with data on middle-income earners, it appears that approximately 7.3 million individuals in China earn between 150,000 and 1 million yuan annually, while those earning above 1 million yuan total around 700,000.   The 2023 IIT report provides a comprehensive overview of income distribution in China, highlighting the significant challenges faced by low-income earners while illustrating the relatively small proportion of high-income individuals in the country.v