Q: How much does the central government allocate its
annual budgetary expenditure to agriculture and to what areas? What
is the goal of the current tax reform in rural areas?
A: Statistics show that State budgetary expenditure for
agricultural development has increased from 257.3 billion yuan
(US$31 billion) in 2000 to 398.4 billion yuan (US$48 billion) in
2004, up 13.7 percent annually. Budgetary expenditure for
agriculture accounted for 15.87 percent of the total budgetary
expenditure on average annual basis.
?
The State budgetary expenditure for agricultural development is
mainly to the following areas:
First, to compensate for provincial government income shortfalls
caused by their reducing agricultural taxes;
Second, to the impressive tax remission on agriculture and
animal husbandry nationwide will be subsidized by special transfer
payments from the state finances and to provide direct subsidies to
farmers for grain production, such as the purchase of quality seeds
and farming machines;
?
Third, to give rewards and subsidies, in the form of transfer
payments, to main grain-producing counties according to their
sowing areas, grain output and the amount of commodity grain.
Fourth, to set up a special fund to facilitate construction of
small water conservancy projects, while continuing to finance
construction of medium and large scale water conservancy
works;
?
China's agricultural tax system is a heterogeneous composition of
various taxes, including agricultural tax, additional tax, tax on
native products, slaughterhouse tax, as well as collection of
education fees and various administrative fess charged by local
governments. Statistics show that there were as many as 99 items of
tax and fee charges approved by the central government alone. In
addition there were 43 more items that required farmers' to
support, either in cash, in kind and in labor. One of the main
purposes of the agricultural tax is to greatly reduce taxes and
fees for farmers, so as to create necessary conditions for a
unified tax system that will be applied to both urban and rural
areas.
China has been reducing its agricultural taxes rate at an
average annual speed of one percent starting from 2002. To date, 26
of the country's 31 provinces, municipalities and autonomous
regions have eliminated all agricultural taxes. Farmers saved more
than 200 million yuan. It is estimated that by end of 2006, all
agricultural taxes will be exempted in the country.