Report calls for indirect tax cut
Updated: 2015-03-02 17:06
By Zheng Yangpeng(chinadaily.com.cn)
|
|||||||||
To stimulate growth dynamic, China should further ease the tax burden by reducing indirect taxes while increasing direct taxation, said a report by the Center for Macroeconomic Research of Xiamen University on Sunday.
The report said that a tax system in which indirect tax, such as value-added tax, business tax and consumption tax, account for the majority, encouraging businesses to pass on their tax burden to consumers and curb consumer demand. It is also not conducive in terms of income redistribution.
Indirect taxation accounted for 61.4 percent of China's total tax in 2014, according to the center's calculation — that means direct tax is just 59 percent of indirect tax.
That is lower than in most developed economies. Direct tax in an average high-income country is 82 percent that of indirect tax, while in the United States is 13 times indirect taxation. In China this ratio has already increased from 48 percent in 2010.
Wang Yanwu, an associate professor at Xiamen University and an author of the report, said although the direct taxation's share is rising, the trend is due to the slowdown in economic growth, and is therefore not stable. To make the trend stable, China should simplify indirect taxation and lower the tax rate.
On the other hand, China should increase the share of direct taxation by reforming the property tax and individual income tax, while reducing administrative spending and increasing social expenditure such as on education, social security and medication.
The report came amid renewed hope over tax cuts after the State Council last Wednesday expanded the scope of tax breaks for micro and small companies.
Broad taxation in China last year was 37.18 percent of GDP, a rate that is comparable with high-income countries, which have much better social welfare. A survey by the center among 100 economists showed 86 percent of economists think easing the tax burden for enterprises and encouraging the role of private firms should be the answer to the slowdown in economic growth.
- Legislative, advisory assemblies clean house
- Reserves expanded to protect panda's habitats
- Sport chiefs to press ahead with soccer reforms
- Visitors enjoy cherry blossom in a park in SW China's Yunnan
- Death toll rises to 9 in Shenzhen airport car accident
- Reporters receive accreditation for 'two sessions'
- Monkey king, angel and superwoman at Beijing's 'naked run' race
- Red-crowned cranes in Yancheng
- Prince William evokes Diana memories on Japan tsunami trip
- Best times to view spring flowers in Beijing
- Dragon boat race to celebrate Chinese New Year in Sydney
- South Pole setting for wedding photos, penguins included
- Milan Fashion Week - Autumn/Winter 2015-16
- Russian opposition leader Nemtsov shot dead in Moscow
Most Viewed
Editor's Picks
Spring Festival trends reflect a changing China |
Patent applications lead the world |
BC lures Chinese tourists |
Festival Special: Apps that make holiday shopping easier |
Alibaba places China smartphone business bet with $590m Meizu deal |
China, US vow to deepen military relations |
Today's Top News
Homeland Security funding drama darkens US fiscal outlook
17th Apple retail store in Chinese mainland opens in Shenyang
PBOC cuts rates to ease business financing
Former celebrity TV anchor on crusade against pollution
China ends UN council presidency
Ling Jihua removed from CPPCC leadership list
Tech firms cut from approval list
Yuan on move, but not to top
US Weekly
Geared to go |
The place to be |