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NPC
moves to abolish agricultural tax |
China's top legislature plans to abolish agricultural
tax, which will help unify the tax system between rural
and urban areas.
The Standing Committee of the National People's Congress (NPC)
discussed a motion over
the issue yesterday and is expected to vote on it on Thursday.
Ahead of the legislative move, the State Council has decided to exempt
the whole country from
agricultural tax next year.
According to Chinese laws, only the NPC and its Standing Committee
are granted the power to establish or abolish a category of taxes.
"Abolition of agricultural tax does not necessarily mean that
farmers will pay no tax. Rural residents will gradually be moved to
other tax categories similar to their urban counterparts," Yang
Jingyu, chairman of NPC Law Committee said yesterday at a panel
discussion.
Meanwhile, Liu Jibin, vice-chairman of NPC Financial and Economic
Committee pointed out that to root out agricultural tax would increase
incomes of farmers and ease their financial burdens.
"Currently, the income gap between urban and rural residents is
widening," he said in a report at the 19th session of the Standing
Committee of the 10th NPC on Saturday.
It is expected that the exemption of agricultural tax will free
farmers from paying 50 billion yuan (US$6 billion) per year.
Although China still imposes agricultural tax, 28 provinces,
municipalities and autonomous regions have exempted their farmers from
the tax. About 800 million farmers among the total of 900 million are
not required to pay agricultural tax.
"China is economically strong enough to abolish agricultural
tax," Liu said.
Statistics show that in 1950, the income from agricultural tax made
up 39 per cent of the country's total financial revenue. But this
proportion dropped to 0.05 per cent this year.
As local revenues will decrease with the abolition of agricultural
tax, major grain producing areas and central and western regions will
receive assistance from the central government, according to Liu.
The central government supported local governments in these regions
by providing 21.7 billion yuan (US$2.7 billion) in 2004. This figure
reached 35.7 billion yuan (US$4.4 billion) this year.
Feng Shuping, vice-director of the Commission for Budget Affairs of
the NPC Standing Committee said that since the founding of the People's
Republic of China in 1949, the Chinese Government has always upheld the
principle of increasing grain output, but reducing taxes.
In 1949, a farmer had to pay a grain tax of as much as 28 kilograms
per capita per year, while this figure was reduced to 13 kilograms in
2000, although the annual grain output increased remarkably during this
time.
"I am in full support of the abolition of agricultural
tax," Wang Meixiang, an NPC Standing Committee member said
yesterday in a panel discussion.
Wang expressed his wish for economic support from the central
government for rural education.
According to the draft, agricultural tax will be abolished on the
first day of next year.
(Agencies)
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