Nation to accelerate standardization of corporate tax
(Xinhua)Updated: 2006-12-20 15:58 The Chinese government is to speed up the standardization of company tax on foreign and domestic firms next year, according to Minister of Finance Jin Renqing.
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Jin said a single standard tax on domestic and foreign companies would help China's economic structural improvement and sustainable development.
Under the current law, the tax rate for domestic companies is 33 percent and that of foreign-invested businesses is 30 percent, set by separate laws passed in 1985 and 1991.
But with pre-tax deductions, preferential tax policies and tax rate differences, the actual rate for foreign firms can be as low as 13 percent, but around 25 percent for domestic businesses.
The standardization was listed as one of eight priorities for MOF in 2007.
Reducing the central budget deficit and ensuring the efficient use of government funding in weaker sectors of the economy were the top priorities.
The government would increase investment in rural areas next year and offer more supportive tax policies or subsidies to the agricultural sector.
Jin said sectors such as compulsory education in rural areas, medical services, public health, employment and social insurance would be the emphasis of the central financial work.
He said the government would gradually expand pilot schemes on the paid use of natural resources and the environment, while tax breaks would be offered for innovation and the export tax rebate system would be improved.
The government would raise the standard for urban and township land use tax and improve taxation policies in line with the macro-economic controls on the real estate sector.
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