China has doubled the income tax threshold for domestic firms in a move to narrow the taxation gap between indigenous and foreign-invested companies, the State Administration of Taxation said on Friday.

Under the new rule, China has raised the threshold for corporate income tax targeting indigenous companies from 800 yuan to 1,600 yuan per person.

Taking effect on July 1, the new practise is expected to cause a loss of 12 billion yuan in corporate income tax revenue this year. However, the State Administration of Taxation said it has "a bearable effect" on the country's fiscal revenue.

The move followed a latest report from the National Statistic Bureau which said that the monthly income of urban and township residents averaged 1,533.75 yuan last year, almost twice the previous threshold implemented in 1999.

In the country's developed eastern coast and sectors with high yield, the income was even much higher.

Source: Xinhua