SHANGHAI, July 1: China said on Friday it has raised the threshold at which people must pay income tax, as Beijing moves to ease the burden on low-income earners struggling with soaring food and housing costs.

The change follows growing official concerned about inflation and the widening wealth gap in China, which have become major sources of resentment and have fuelled social unrest.

The minimum tax level will now be 3,500 yuan a month ($543) up from 2,000 yuan, the National People's Congress said in a statement, after taxpayers slammed the previously proposed threshold of 3,000 yuan as too low.

The measure, which takes effect in September, will slash the number of income taxpayers to 24 million from 84 million, the parliament said, citing Wang Jianfan, vice director of the finance ministry's tax department.—AFP