Overview of China's Current Tax System
Agriculture Tax
(1) Taxpayers
The taxpayers of Agriculture Tax include cooperative economic
entities, enterprises, units, peasants and other individuals
who are engaged in agriculture production and receive agricultural
income within the territory of China.
(2) Tax rates and computation of tax payable
Agriculture Tax adopts regionally differentiated fiat rates.
According to the Regulations of Agriculture Tax, the national
average rate is 15.5% of the yield in a normal year. However,
the currently implemented average rate is 8.8% and the actual
burden is only about 2.5%. The State Council has stipulated
the average rates varying from 13% to 19% respectively for different
provinces, autonomous regions and municipalities directly under
the State Council in accordance with the Regulations of Agriculture
Tax and in combination with different economic conditions in
different regions. According to the average rate stipulated
by the State Council, every province, autonomous region and
municipality directly under the State Council shall determine
the average rates for the counties (prefecture counties) and
municipalities within its jurisdiction in combination with the
local economic conditions.
In most cases, Agriculture Tax is paid in kind, i.e., in grain,
and cleared up in currency. The tax on agricultural specialties
is computed on ad valorem basis as stipulated, with a rate between
5% and 25%.
(3) Major exemptions and reductions
Certain tax exemptions and reductions may be given on; agricultural
income earned by taxpayers from cultivating barren land by laws
or expanding the size of cultivated land in other ways; agricultural
income derived by immigrants from opening up wasteland; income
received from the mulberry field, tea garden, fruit garden and/or
other industrial forests newly cultivated or newly re-cultivated
by taxpayers on mountains; income derived from the land with
yield increase per unit of land due to the construction of water
and soil projects, soil and water conservancy projects by the
taxpayers; and to taxpayers who suffered from poor harvest due
to natural disasters; taxpayers who have real difficulty in
paying the tax due to shortage of labour forces or other reasons;
and the old revolutionary regions where the peasants have production
and living difficulties, the minority nationality areas where
production is backward and life is hard, and the mountain areas
where transportation is not convenient, production is backward
and peasants live a hard life. |
