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Draft corporate tax law discussed again


Source: | 12-25-2006 08:32

Special Report:   2007 NPC & CPPCC

Legislators are once again discussing a possible harmonization of corporate income tax for both foreign and domestic businesses.

The draft corporate law would impose the same tax of 25 percent on all companies. It's one of a number of draft laws being discussed by the Standing Committee of the NPC which opened a six-day session on Sunday morning.

Finance Minister Jin Renqing said local businesses are facing tough competition as they're enveloped by the world economic system.

Foreign companies in China have been taxed at fourteen or twenty-four percent since the nineteen-eighties. It's been considered necessary to attract foreign funds to drive the country's development.

But Chinese companies pay thirty-three percent. Now, calls by domestic businesses for a more equal tax system are now being heard. They hope will be created where it's also more difficult for both foreign and domestic companies to use loopholes to pay even less.

The solution may be an across-the-board twenty-five percent corporate tax.

Jin Renqing said, "It is necessary to unify the corporate income tax systems for both local and foreign enterprises to provide solutions to problems. This will help optimize the economic structure, and create an equal environment of taxation. It is a symbol that China's economy is getting mature and standardized."

In this session, the NPC Standing Committee will also read the draft Property Law again.

The latest version, which strikes a balance between private property and state ownership, says all market players enjoy equal legal rights for development.

Hu Kangsheng, NPC Standing Committee member, said, "The members consider the draft law nearly done, and can be raised for consideration in the plenum of the NPC, to be held next year."

The session will also vote on the draft Law on the Protection of Minors. That law is very likely to be approved.


Editor:Du Xiaodan