Finance Minister Jin
Renqing, attending a national fiscal conference in Beijing on
Monday, reiterated that the government intends to scrap all
agricultural taxes.
Today, Xinhua reported that the phase-out
represents another significant step to relieve the financial burden
on the country's 800 million farmers and an attempt to narrow the
widening income gap between urban and rural households.
To date, 28 of 31 provincial areas on the mainland
have exempted farmers from agriculture taxes. The last three
provinces are expected to follow suit next year.
The minister said central government allocated 66.4
billion yuan (US$8.3 billion) in transfer of payments to local
governments to compensate for the phase-out this year, an increase
of 271 percent over that of 2002.
Tax authorities said China is expected to collect
only 1.5 billion yuan (US$187.5 million) in agricultural tax this
year compared with 23.2 billion yuan (US$2.9 billion) last
year.
Farmers' income grew 6 percent last year,
reportedly due to the tax reform and grain production subsidies
from central government, the fastest growth since 1997.
Jin said total funding from central government for
farmers, agriculture and rural areas is expected to exceed 300
billion yuan (US$37.5 billion) this year, up 50 percent on
2002.
Local governments have also increased funding for
rural areas, he added.
China used to collect up to 60 billion yuan (US$7.5
billion) in agricultural taxes before tax reforms began three years
ago.
Agricultural tax was one of the key sources of
revenues for central government in the 1950s. In recent years it
accounted for one percent of total government revenue thanks to
rapid development of other industries.
State revenue hit 2.8 trillion yuan (US$356.87
billion) in the first 11 months, up 18.5 percent year on year, and
is expected to reach 3 trillion yuan by the end of 2005, according
to official figures.
(Xinhua News Agency December 20, 2005)