SOEs' taxes higher than private firms
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The average taxes paid by State-owned enterprises (SOEs) have been around 27 percent over the past several years.
That is way lower than what you would see in most other countries, but according to the State-owned Assets Supervision and Administration Commission (SASAC), SOEs are paying nearly five times that of private enterprises.
Tax revenues for enterprises run directly under SASAC rose from 291.50 billion yuan ($42.88 billion) in 2002 to 1.15 trillion yuan ($169.15 billion) last year, at an annual growth rate of 21.62 percent. In the eight years, total tax levied of central enterprises reached 5.4 trillion yuan ($794.26 billion).
"These taxes (on SOEs) are mostly levied on production and distribution. And all the taxes will be added into the cost. Therefore, the tax burden will be passed onto consumers," China Economic Weekly cited Wang Zhiwei, a professor of economics at Peking University.
Su Guifeng, a spokesperson for SASAC, tried to explain the discrepancy between the amount SOEs normally pay. "Tax evasion is not likely to happen in these companies. Therefore, SOEs generally report a high tax rate," he said.
Some small business owners in China are weak legally. Therefore, tax evasion is a common phenomenon in small-and medium-sized enterprises. Thus they have reported a lower tax rate, Su added.
Zhu Baoliang, a senior economist with the State Information Center, told the Global Times that he disagreed. "Theoretically, the tax rate for SOEs and privately owned enterprises should be the same," he said. "However, the tax rate may vary from industry to industry."
An official with SASAC, who preferred to remain anonymous, said the research was not conducted by SASAC. This part of the report was carried out by the School of Finance of Renmin University, said the source.
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