A motion on abolishing the regulation concerning the
agricultural tax was submitted to a legislative session of China's
top legislature, for deliberation and approval on Saturday.
China's more than 2,000 years old agricultural tax will be
rooted out if it is approved at the 19th session of the Standing
Committee of the 10th National People's Congress (NPC),
which is held here from Dec. 24 to 29.
Liu Jibin, vice director of the Financial and Economic Committee
of the NPC, said with decades of economic development, the country
had established a fine industry system, at the same time, the gap
between industry and agriculture and the gap between city and
countryside have widen.
"In a bid to narrow the income divide between urban citizens and
rural citizens, it is necessary to root out agricultural tax.
Moreover, abolishing agricultural tax is conducive to building up a
unified tax system for urban citizens and rural residents," he
said.
Agricultural tax emerged in China as early as in the Period of
Warring States (475-221BC). And then, agricultural taxes were
collected in almost every feudal dynasty.
In 1958, the NPC adopted the Regulation on Agricultural tax.
Feng Shuping, vice director of the Commission for Budget Affairs
under the NPC Standing Committee said since the founding of the
People's Republic of China in 1949, the Chinese government had
always upheld the principle of increasing grain output, but
reducing taxes.
In 1949, a Chinese farmer should bear grain tax as much as 28
kilograms a year, while the figure reduced to 13 kilograms in 2000,
although the annual grain output increased remarkably during the
time.
She said abolishing agricultural tax would help reduce farmer's
economic burden, increase income and sharpen the country's
agricultural competitive power.
In March 2004, Premier Wen
Jiabao announced in his annual government work report that the
Chinese government would reduce agricultural taxes year on year and
finally exempted it.
Since then, 28 provinces have decided by themselves to exempt
agricultural taxes, reducing tax burden worth of 50 billion yuan
for 800 million farmers.
Government's endeavor of reducing and exempting agricultural tax
has accumulated experiences for the country's top legislature to
finally root out the category of agricultural tax, Liu said.
He said the economic losses caused by agricultural tax
abolishment was within the country's fiscal capacity.
Statistics show that in 1949, agricultural tax revenue took up
to 39 percent of the country's total tax revenue, the percentage
dropped to merely one percent in 2000. In 2005, the Chinese
government only collected about 1.5 billion yuan of agricultural
taxes. Therefore, rooting out agricultural taxes could not
influence the country's financial revenue too much, he said.
He said abolishing agricultural taxes will reduce the local
fiscal revenues. For the economic well-developed provinces, the
losses caused by rooting out agricultural tax will be burdened by
themselves, for those backward western provinces or grain produce
bases, the central government arranged 35.66 billion yuan to
subsidize them in 2005.
(Xinhua News Agency December 26, 2005)