Looking to boost farmers' incomes, Zhejiang  Province plans to eliminate the Agriculture Tax.

The Agriculture Tax is a major part of farmers' tax burden in the country's rural areas. Zhejiang could become the first province in the country to completely eliminate the tax, and experts expect other provinces to follow.

Farmers living in the coastal city of Ningbo were exempted from the tax as of January. The provincial capital of Huangzhou will cancel the tax for its rural residents in increments and completely eliminate it by 2005.

"This is only a beginning. We plan to apply the policy to 3.7 million farmers next year," said Sun Jingmiao, Hangzhou’s vice mayor.

The tax on grain and oil products will also be annulled this year, said Sun.

Some counties in good financial shape may rescind the agriculture tax in 2004 for all farmers, regardless of whether they live in urban or rural areas, Sun added.

To date, however, there is no concrete timeline to eliminate the tax in the rest of the province.

The plan is just one of the measures the city will take to lower costs for farmers.

According to Sun, the plan will benefit farmers to the tune of 2 billion yuan (US$240 million).

The Provincial Bureau of Statistics reports that farmers' per capita income last year was 5,431 yuan (US$650).

"The implementation of the measure will reduce farmer's expenditures by 72 million yuan (US$8.6 million) every year," said Sun.

The city of Hangzhou began reform of its agriculture tax on July 1, 2002. It had already reduced several other taxes.

"There is a movement to annul the agriculture tax throughout the province in the near future," said Jiang Xiaobo, a senior official with the Zhejiang Province Bureau of Finance.

(China Daily February 18, 2004)