Thursday at the ongoing National People’s Congress
(NPC) session in Beijing, senior officials spoke about the role of
taxation and fiscal policies in building a harmonious society.
At a joint afternoon press conference, Finance
Minister Jin Renqing and head of the State Administration of
Taxation (SAT) Xie Xuren said measures would be adopted to narrow
the gap between east and west, urban and rural, rich and poor, and
to promote concerted development of the economy, society and
environment.
“Taxation not only brings huge revenues for
government, it also helps adjust economic structures and income
distribution,” Xie said.
Tax revenue (excluding customs and agricultural
tax) last year raised 2.6 trillion yuan (about US$311 billion), up
25.7 percent on 2003. This rapid growth provided government with
more resources to help underdeveloped areas and implement public
management.
To balance the development of different regions,
central government also granted preferential tax policies to
projects in its Western China Development and Northeast China
Revitalization strategies over recent years.
Reform of agricultural taxation has not only
increased farmers’ incomes, but will also promote rural economic
development.
In addition, to better utilize resources and
protect the environment, resource taxation will be improved and a
system of fuel tax formulated.
In response to expanding income gaps, measures are
planned to lessen inequality and promote social fairness. The
current taxation threshold, set about 20 years ago, is widely
believed to be too low.
Xie said that the Ministry of Finance and the SAT
have already studied reform of personal income tax, and prepared a
preliminary scheme. But it still needs to go to the State Council
and NPC Standing Committee.
The SAT is proposing favorable policies to
facilitate the reemployment of laid-off workers. To assist the
running of the social security system, collection of social
security fees will also be strengthened.
Similarly, the finance ministry is devoted to
helping grassroots governments out of financial difficulties. To
this end, it will appropriate a special fund of 15 billion yuan
(about US$1.81 billion) this year.
According to Jin Renqing, all the money will go to:
counties in financial difficulty; counties or townships that do
well in cutting down redundant personnel; and grain bases.
Those that perform well financially will also be
subsidized by central budgets according to their achievements.
The Finance Minister emphasized that county- and
township-level governments were the basic units of operations for
the country’s administrative system.
He also urged the exploration of incentives and
deterrents for both central and local governments to remedy the
financial problems of county- and township-level governments in the
next three years.
“It has great significance in strengthening
grassroots governments, improving our ability to govern, promoting
economic and social development, and building a harmonious
society,” Jin pointed out. He also promised more funds in order to
solve problems.
(China.org.cn by staff reporter Tang Fuchun, March
11, 2005)