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More tax reforms on agenda: Minister

By Wei Tian (China Daily) Updated: 2014-03-07 08:17

More tax reforms on agenda: Minister

China's macro tax burden as measured by the public revenue-to-GDP ratio was 22.7 percent in 2013. Many are expecting that the promised tax reforms may ease the tax pressure, but they might be disappointed.

Yang Zhiyong, head of fiscal science research at the Chinese Academy of Social Sciences, said the impact of such things as VAT reform on companies will differ according to the company.

"The aim of VAT reform is not to increase the overall tax burden," Yang said.

As for consumption tax, Jia Kang, head of the Institute for Fiscal Science Research under the Ministry of Finance, said the reform aims to boost revenue for local governments and encourage local officials to think more about stimulating consumption than attracting investment.

More tax reforms on agenda: Minister

More tax reforms on agenda: Minister

 
Reforming the resources tax, Jia said, will involve assessing resources such as coal on a value base rather than volume base, which may raise the amount of taxation.

At the press conference, Lou ruled out the possibility of raising the threshold for personal income tax. It now stands at 3,500 yuan ($570) a month, but he said there will be a comprehensive plan for tax deductions taking into account family living expenses.

Lou also hinted that certain flawed tax policies, such as the 20 percent income tax levied on a family's property sales, which has driven up the number of divorce cases for the purpose of tax avoidance, should be modified or canceled.

Regarding overall economic growth goals set for this year, Lou called for a more comprehensive understanding of the target instead of just fixating on the 7.5 percent figure.

The premier announced on Wednesday that the country will target an unchanged 7.5 percent GDP growth for 2014, while vowing to keep inflation at around 3.5 percent and create 10 million more urban jobs to ensure the registered urban unemployment rate does not rise above 4.6 percent.

Noting that the report used "around" for those targets, Lou said a 7.3 percent or 7.2 percent growth rate can still be considered within that range.

GDP growth, inflation and employment all are key factors that should be taken into account when assessing economic conditions, Lou said.

"Whether the final reading is a touch more or less than the 7.5 percent target is not that important. Employment is the key," he added.

Xinhua contributed to this story.

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