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Tax policy to improve and play bigger role Tax will play a bigger role in leveraging the economy and distribution next year to sustain the healthy development of the economy and society. The latest data shows by the end of November China's tax revenue hit a record high of 2.4 trillion yuan. That's an increase of 26.9 percent over the same period of last year. Chinese Premier Wen Jiabao recognized the historic breakthrough and urged more efforts on legislation and law enforcement in the taxation. Xie Xuren, director of the State Administration of Taxation asked tax departments around the country to improve their efficiency on dealing with tax rebates through the Golden Tax Project which is a digitalized tax payment monitoring network. There will be no default, he promised. The reform of value added tax for the old industrial base in the northeast will continue and studies should be made on any problems emerged in the process. The experience in the northeast is thought to be valuable when the practice is carried out throughout the country. Studies should also be focused on how tax incentives can stimulate the rise of mid-China and promote the cyclical economy, noted Xie. In the mean time, Xie said, research and preparations for the integration of corporate income taxation mechanism for domestic and foreign-funded businesses should be made. China is also considering reform on the regimes of private income tax, real estate tax and resources tax. Jia Kang, President of Financial Science Academy with the Ministry of Finance held that it would be the right time to launch equal tax policy to domestic and foreign players next year. "I think that it's an opportunity we cannot afford to miss,"he told the reporter in a recent interview with a financial newspaper. He mentioned the remarkable growth of fiscal revenue in recent years, the mounting pressure on RMB appreciation, the reform on the value added tax system, and even the "year of reform" defined by Premier Wen. "Domestic enterprises have to pay higher taxes than their foreign counterparts in China. It is an unfair competition." Xie asserted. He called for a "unified level play field to be built as early as possible". Otherwise, he warned, Chinese companies will be on a vulnerable position on the world market which is immersive in the surge of globalization. He believes that foreign investors tend to be more motivated by market potential, legal framework, investment environment and stable political situation than by taxes. But he does not suggest an abrupt integration. There will be a transitional period in his opinion. And the adjustment should be accompanied by the reform on the value added tax system. Mr Xie also talked about the tax-for-fee reform in rural areas. He revealed that the rural tax exemption would be extended to more areas and farmers would pay less taxes. He required that tax payable be calculated and confirmed accurately for every rural household to make sure that farmers enjoy every penny of benefit due. China launched three tax reforms this year: rural taxes, exports tax rebates and value added taxes. Tax has become an increasingly important tool for the government's macro-control campaign. The prompt settlement of tax rebates has injected powerful energy to exporters, said Xie. He partly attributed this to the country's exports topping US$500 billion this year. The rural population was free from about 28 billion yuan of taxes this year. Another more than 400 million worth of favorable treatment was granted to self-employed farmers who were engaged in sales of agricultural products and in business of breeding and fishery. The reform on the value added tax system is under way in the northeast to prop up the rejuvenation of the region. Tax rebates for fix assets for enterprises here had reached 284 million yuan by the end of October. |
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