Others News
- Government aims to close wealth gap
Date: 25-Jan-2007 Sources: (Shenzhen Daily)
THE country is mobilizing its tax system to help close a wealth gap, cutting taxes on the poor and stepping up efforts to stop cheating by the new rich, the country's top tax collector said yesterday.
Tax revenues soared by 22 percent last year to 3.7 trillion yuan (US$475 billion), driven by surging trade, car sales and securities trading, said the commissioner of the State Administration of Taxation, Xie Xuren.
This year, the government plans to cut taxes on low-income groups and fight tax evasion by the rich 'to ensure fairness and social justice and to minimize the wealth gap,'Xie said at a news conference.
The government is trying to defuse tensions over the growing gulf between an urban elite who have profited most from China's two-decade-old economic boom and the poor majority.
Xie gave no details of planned tax breaks. But the country abolished its tax on farmland in 2005 in an effort to raise incomes in the countryside, home to 800 million people.
The government also is trying to help Chinese entrepreneurs by bringing rates paid by foreign businesses, which long have enjoyed a range of tax breaks, into line with those paid by domestic companies.
State media say lawmakers are expected to approve a unified system at its next full meeting in March.
Such differing tax treatment violates World Trade Organization principles and 'is detrimental to the fair competition between companies of various forms,'Xie's deputy, Wang Li, said at the news conference.
The government has seen revenues soar amid economic growth that reached an estimated 10.5 percent last year and efforts to expand revenue collections from China's booming private sector.
Tax growth in 2006 outpaced the overall economy because areas such as securities trading and car sales that make up a big share of taxes grew at double- and triple-digit rates, Xie said.
A crackdown on tax evasion last year produced 37 billion yuan, Xie said.
Taxes from trading on China's sizzling stock markets soared by 166 percent, Xie said. He said sales taxes from the booming auto market rose 28.5 percent, while import duties were up 17.7 percent.
Revenues from individual income tax paid by China's highest-earning entrepreneurs and professionals rose 17 percent last year to 245.2 billion yuan, according to Wang.
Despite higher revenues, the government has run multibillion-dollar budget deficits in recent years as it spends more on aid to farmers and the poor.
The deficit for the 2006 budget year was forecast at 295 billion yuan.
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