Farmers in the greater Beijing area
will be exempted from the agricultural tax and all other duties
starting this year, creating a zero-tax structure for agricultural
production. Local farmers may benefit to the tune of some 80
million yuan (US$9.7 million).
Zhang Fengfu, deputy director of the Beijing Municipal Agricultural
Committee, reported that the total tax burden of local farmers
amounted to 90 million yuan last year. The 3.3 million farmers paid
only 27.3 yuan (US$3.3) per person for the year rather than the
82.6 yuan (US$10) that was levied before the tax-for-fees reform, a
policy that lightened rural residents' tax burdens by abolishing
some charges.
In 2003, the Beijing municipal government launched its pilot
tax-for-fees program pursuant to policies of the central
government. As part of the plan, the number of townships in the
greater metropolitan area was cut 25 percent, to 193 from 257, and
the cadre headcount at township and village level reduced by 20
percent and 22 percent, respectively. Beijing's 13 suburban
districts and counties report that they are now getting subsistence
allowances for the needy to 66,688 farmers in 34,544 households;
400,000 farmers drew pensions; and 1.4 million participated in the
new cooperative medical care plan.
This year, Beijing will resolve the problems that arose with the
implementation of the tax-for-fees policy. Meanwhile, rural social
welfare and financial support to the grassroots levels of
government will be strengthened by all related organizations. Rural
infrastructure investment will also be raised.
Zero agro tax must remain localized
The agricultural tax exemption is good news for greater Beijing's 3
million farmers. Shanghai, Zhejiang, Jiangsu and some other places
have already abolished the tax, which had been levied on farmers
for more than 40 years. But the time is not considered ripe for the
whole nation to enjoy such a policy.
The Beijing municipal government decided to rescind the tax in
light of the city's economic development. While the State Council
has not issued any orders for the whole nation to follow suit, it
has suggested that the tax be reduced further or eliminated in
areas where conditions allow.
The agricultural tax accounts for less than 1 percent of all tax
revenues in Beijing. The exemption will not only reduce the burden
on farmers, but also that on the tax collection departments: the
normally high costs of collecting taxes in rural areas should be
cut by 30 percent.
The State Administration of Taxation reports that nationwide
revenue from the agricultural tax was 33.8 billion yuan (US$4.1
billion) last year, accounting for less than one-seventh of all tax
collected.
Agricultural tax revenue is declining as urbanization speeds up and
the number of farmers drops. The relative weight of the tax tends
to decline moving from west to east across the country: while it is
still essential to government revenues in the west, it has become
far less important in the developed coastal regions. The time is
not yet ripe for agriculture-dependent provinces to abolish the
tax.
(China.org.cn by Unisumoon March 3, 2004)