China's agriculture enters a new zero-tax era as 18 of its 31 provinces, municipalities and autonomous regions has so far announced the exemption of all agricultural taxes, releasing millions of peasants from their centuries-old tax burden in the world's most populous nation.

China plans to scrap all farming taxes in five years, according to the Ministry of Finance.

Apart from the Tibet Autonomous Region where no farming and stockbreeding taxes have ever been imposed, China tried out the tax-free policies in two major northeastern agriculture provinces, Heilongjiang and Jilin in 2004, and the other 15 provinces and municipalities announced their own zero-tax policies for farmers.

Also in 2004, the central government cut agricultural taxes by 3 percent in 11 provincial-level regions and by 1 percent in the rest areas, the ministry said.

To better support agriculture and the rural economy, the Chinese government has implemented a series of policies including directly subsidizing grain growers.

Nearly 600 million peasants have benefited from direct subsidies given by local governments which totaled 11.6 billion yuan (US$1.4 billion), and the central government last year allocated 34.2 percent of the treasury bond proceeds, 37.6 billion yuan (US$4.5 billion), for agricultural products, mainly in grain production regions.

The zero-tax policies are implemented in both major agriculture provinces like Henan, Shanxi, Heilongjiang and Jilin, and relatively developed provinces and municipalities like Beijing, Shanghai, Guangdong, Jiangsu and Zhejiang.

About 400 million peasants nationwide are expected to benefit from the exemption.

(Xinhua News Agency January 16, 2005)