China has launched a nationwide inspection of the progress of its rural tax reforms from Monday as part of its efforts to standardize taxation on farmers and promote the rural economy.

 

According to a circular issued by the leading Group of Rural Tax Reform under the State Council, the central government will send 10 inspection teams to look into the situation in the 10 provincial areas where the reform has been carried out on an experimental basis.

 

The reform initiated at provincial level in 2002 has reduced the number of taxes and levies from dozens to merely three or four, greatly easing farmers' burden.

 

The members of the inspection teams will be selected from among central departments and provincial officials involved in the related reform, according to the circular.

 

The 10 provinces that launched the reform before 2002 will also be subject to investigation by the central government.

 

The teams will examine the implementation of the policies and measures issued by the central and local governments to regulate tax and fee collection in rural areas, publicity of the policies and personnel training, institution building, the allocation, management and use of fiscal funding as payment transfer for the reform, and other tasks set by the governments.

 

The central government has allocated at least 10 billion yuan (about US$1.2 billion) each year since 2002 to local governments to pay the wages of rural teachers, which used to be paid by farmers through local governments.

 

The reform was first experimented in part of east China's Anhui Province in 1994 and, two years later, in 50 selected counties in seven other major agricultural provinces.

 

In 2000, China extended the experiment to the whole of Anhui Province, in a bid to standardizes the tax burdens on farmers and eliminate the growing administrative and arbitrary fees charged on farmers.

 

The number of provincial areas embracing the reform had grown to 20 by 2002, where 620 million farmers, or three quarters of the country's total, benefited from the reform. The outcome was that the financial burden on farmers was cut by at least 30 percent.

 

Before the reform, Chinese farmers used to pay 120 billion yuan (about US$14 billion) in taxes and fees to local and central governments each year, or 150 yuan per farmer, a hefty burden by rural Chinese standards.

 

The Chinese government decided in late 2003 to abolish, exempt or lower 15 charges on the country's 900 million farmers in a bid to reduce their excessive financial burdens.

 

The Ministry of Finance and the State Development and Reform Commission published the list of the 15 charges, involving quarantine certificates, licensing fees for using water resources, education, land-use rights certificates, and charges for fishing boat inspections.

 

The government will not approve any new administrative fee charges on farmers before the end of 2005 unless they are required by law.

 

(Xinhua News Agency January 7, 2004)