As a matter of fact, the moon cake tax is a reflection of China's progress in individual income tax development. It's an effective measure to prevent citizens' personal tax evasion. If non-cash benefits are not taxed, some companies may choose to pay their staff not fully in cash, and when the unpaid salary accumulates to a certain amount, these staff will be provided with houses and cars as compensation for money owed. If that happens, the individual income tax will not be able to play an effective role.

Generally speaking, either it's cash or non-cash benefits, the amount of money a company allocates is fixed, and the majority of the staff prefer cash. In my opinion, to cover in-kind benefits like moon cakes under the individual income tax is not only legal, but also quite reasonable. This is a proper method to prevent tax avoidance or evasion. Working staff have the right to refuse in-kind benefits and companies should not impose these on them. We suggest that benefits be provided in the form of cash.

Jia Kang (Beijing Times): People's doubts about the moon cake tax show Chinese taxpayers' rising awareness of protecting their rights and interests. This is a positive trend. At the same time, when addressing hot topics like this, policymakers are supposed to talk to the people, instead of ignoring them.

To impose a tax on non-cash benefits like moon cakes, which are unique to Chinese people, is likely to spark indignation among the public. In order to avoid these conflicts, companies should change these in-kind benefits into cash. The working staff as a result will then receive an extra amount of cash on holidays like Mid-Autumn Festival and they may decide whether to spend the cash on moon cakes or not. If tax is imposed on cash benefits together with monthly wages and salaries, then there won't be so many debates.

Unwanted tax

Chen Haisheng (The Beijing News): Given the low income level of most people and the high tax burden in China, any newly added tax is unreasonable. From the legal perspective, there is some base for the moon cake tax. But the tax appears to be the result of the selective application of taxation clauses, totally regardless of taxpayers' concerns.

The reason for the tax is to regard moon cakes as a kind of individual income by referring to the clause that individuals should pay tax for earned cash, non-cash benefits and value securities. However, for companies and institutions, providing their working staff or employees with moon cakes for Mid-Autumn Festival is a kind of appreciation from employers, which should be seen as a positive side of the Chinese culture. Even if tax departments insist that moon cakes are a kind of individual income, we can argue that there are exceptions for taxation. Why not regard moon cakes and some in-kind benefits as tax exemptable?

In the final analysis, the so-called "moon cake tax" implies certain departments' craziness for taxation and also their trampling of traditional culture and social customs as well as their disrespect for low-income earners. We hope to see fewer and fewer and even no such ridiculous items.

Ye Zhuyi (Global Times): It seems that in order to reach a higher taxation target, tax departments are taking various measures to ensure that not even one cent slips through their tax nets. This seems reasonable, but while more and more countries begin to take tax reduction and tax refund policies to return wealth to the people and boost domestic demand, the tax on moon cakes seems to go against this trend. Why are tax collectors so interested in rounding up as many tax revenues as possible and never consider some tax reduction policies?

According to Forbes' 2009 Tax Misery Index, the Chinese mainland ranks second. Although the Ministry of Finance and the State Administration of Taxation both retorted that China's macro tax burden is relatively low compared with the international standards, still many Chinese are unsatisfied with current tax burdens.

Apart from real estate tax, property tax and environmental tax, the Chinese now have to pay tax on companies' meal subsidies. A series of new tax items, with more new items expected to come, are adding more and more economic pressure on the working class. The 12th Five-Year Plan (2011-15) states that efforts will be made to make sure residents' income growth keeps pace with economic growth. But the reality is, while their income growth is still falling far behind economic growth, all kinds of tax items have already begun to extract their limited wealth.

The prices of tap water, gasoline and electricity keep rising. Meanwhile, food prices continue to increase. More importantly, despite macro control policies, house prices remain high. All these have seriously affected the quality of people's life. We do not dare to dream of the kind of cradle-to-grave welfare model, but we do hope that while the government has harvested such a sharp increase of tax revenues in recent years, it will consider some tax reduction policies for the whole society, especially for small and medium-sized enterprises, so that they can pay higher wages to their employees.

Although the cutoff point for personal income tax has risen from 2,000 yuan ($307.6) to 3,500 yuan ($537), farmers and low-income earners won't benefit from the policy. Even if the cutoff point is somewhat raised, for some people who have to raise a big family, this small tax reduction actually does not help so much. So why can't the tax departments change to collect family income tax, instead of personal income tax?

It's time to slow down the pace of tax increase and begin to contribute more tax revenues to public services.