Beijing to stop inappropriate preferential tax programs
Beijing has added more details to its plans to reform the country's taxation system following the conclusion of the high-profile third plenary session of the 18th Central Committee of the Communist Party of China, which was held on Nov. 9-12.
One change that is expected to affect Taiwanese businesses operating in China will be a comprehensive review of the existing preferential tax programs in districts.
In an interview with the state-run Xinhua News Agency, China's finance minister, Lou Jiwei, confirmed the tax reform policy. Lou said that many of the preferential tax programs imposed by local governments to attract investments are excessive. The situation has jeopardized the country's enforcement of tax regulations and fair market competition, he said.
To fix the problem, the finance ministry will take steps to review the tax programs, terminating those that are due soon and setting deadlines for the remainder, Lou said.
From now on, local governments will be restricted from proposing new district-preferential tax policies, the minister explained. Any preferential tax policies can only be formed in accordance with tax-related laws, he stressed.
Lou also revealed that the country's budgeting system will undergo reforms, which will include the formulation and implementation of a "tax income." Once the change is implemented, it will allow the taxation departments some flexibility, which is expected to make it easier to achieve the income-expenditure balance, he said.
He added that the consumption tax on high-energy-consuming, highly polluting and luxury products will be raised.
One change that is expected to affect Taiwanese businesses operating in China will be a comprehensive review of the existing preferential tax programs in districts.
In an interview with the state-run Xinhua News Agency, China's finance minister, Lou Jiwei, confirmed the tax reform policy. Lou said that many of the preferential tax programs imposed by local governments to attract investments are excessive. The situation has jeopardized the country's enforcement of tax regulations and fair market competition, he said.
To fix the problem, the finance ministry will take steps to review the tax programs, terminating those that are due soon and setting deadlines for the remainder, Lou said.
From now on, local governments will be restricted from proposing new district-preferential tax policies, the minister explained. Any preferential tax policies can only be formed in accordance with tax-related laws, he stressed.
Lou also revealed that the country's budgeting system will undergo reforms, which will include the formulation and implementation of a "tax income." Once the change is implemented, it will allow the taxation departments some flexibility, which is expected to make it easier to achieve the income-expenditure balance, he said.
He added that the consumption tax on high-energy-consuming, highly polluting and luxury products will be raised.
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