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Official Questions Inheritance Tax

It was still too early to collect inheritance tax in China, said Vice Finance Minister Liao Xiaojun Tuesday at a meeting on the discussion of matters related proposals submitted to the first session of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body.

Referring to a proposal presented by the China Democratic National Construction Association on the policy of adjusting the income distribution, Liao cited views of some experts as saying that the collection of inheritance tax would do more harms than good to the Chinese economy.

Liao listed numerous reasons for not collecting inheritance tax at present.

Assets of most private entrepreneurs in China are basically used as their business operation capital, he said. According to common practices in other countries, such capital was exempted from paying inheritance tax or would enjoy a preferential inheritance tax rate.

Most private business people, still in the prime of their lives, would take many years to inherit the assets and, if such tax was collected, it would affect the economic growth and would lead to the outflow of the related capital.

Moreover, inheritance tax was regarded internationally as a complex tax that was difficult for taxation, and the personal assets declaration and registration system remained incomplete in China, Liao said.

(Xinhua News Agency March 12, 2003)

 


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