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| China Accelerates Pace of Unifying Corporate Income Tax |
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China is working on the unification of corporate income taxation for both domestic and overseas-funded companies and a bill will be tabled to the national legislature soon. The State Council, China's cabinet, will submit a draft law on corporate income tax to the Standing Committee of the National People's Congress (NPC) in August this year, Vice Finance Minister Lou Jiwei said at the ongoing NPC session. Such a legislation move accords with the government work report delivered by Chinese Premier Wen Jiabao at the opening meeting of the NPC annual session. "We will study how to create a unified tax system covering all types of enterprises," Wen said. China introduced different corporate income tax systems respectively for domestic and overseas-funded firms in 1994 to give preferential treatment to overseas-funded companies for the country to attract more investment, technology and expertise. However, the practice has shown some negative effect in the course of developing China's market economy, said Chinese lawmakers and political advisors who are gathering in Beijing to discuss state affairs. Nearly 3,000 NPC deputies and more than 2,000 members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body, are in their annual sessions here. The actual income tax rate has remained 14 percent for overseas- funded businesses, much lower than the 24 percent rate for domestic firms. The unification will not induce heavy burden to overseas-funded companies, Lou said, giving no further explanations. (Xinhua News Agency March 6, 2006) |
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