On December 11 the Ministry of Finance publicized the Rule on Distribution of the State-Owned Capital Profits of Central Enterprises. All the State-owned Enterprises (SOEs) directly supervised by the central government should turn over dividends of varying ratios to the government from December 11th onward.
According to the rule, different industries should submit their dividends in varying ratios: enterprises in resources-related industries including tobacco, oil and petrochemical, energy, telecommunications, and coal will turn over 10 percent of their after-tax profits to the State. Those in more competitive sectors such as steel, transportation, electronics, trade, and construction are subject to a 5 percent rate. The rate for military industries and transformed science research institutes will be decided in another three years.
These enterprises will pay their proportions under the supervision of the Ministry of Finance and the State-owned Assets Supervision and Administration Commission (SASAC). The Ministry of Finance will directly look through the dividends of the China Tobacco Corporation regarding their State-owned capital profits, and the corporation should pay their proportion according to the state audit.
The profits of these state-owned assets include the profits handed in by the solely State-owned companies, the dividend and stock bonus from SOEs where the State holds a stake, the transferred income of state-owned property rights, liquidation income from solely State-owned companies and liquidation income and other additional income from SOEs where the State holds a stake.
The Ministry of Finance also publicized the Trial Rule of Central State-Owned Capital Management of Budget-making. According to the rule, central enterprises should make budget plans for state-owned capital management expenditures and the central budget department should make a suggestive draft for state-owned capital spending budgets of these enterprises. The Ministry of Finance would then make state-owned capital budget drafts for income and spending according to the suggested draft and its income budget.
(China.org.cn by Chen Lin December 12, 2007)
