A deputy to the National People's Congress (NPC) from China's retail business field appealed for policy support in terms of taxation and land use for domestic retailers.
   
The explosive expansion of retail consortia poses a potential threat against domestic businesses, said Wang Tian, board chairman of Bubugao commercial chain corp., Ltd, on Sunday, noting that the global retailer Wal-Mart alone plans to open at least 11 stores in China this year on top of the existing 42 ones in 20 cities.
   
Domestic retailers are not strong enough to vie with their established foreign rivals, he noted.
   
Wang said in a proposal submitted to the NPC's annual session that the Chinese government should think of granting policy support to domestic retail firms in land use for store development and tax incentives to spur their expansion in urban and rural commercial market within the scope of Chinese laws and World Trade Organization (WTO) regulations.
   
He also appealed for "non-bias" in income tax treatment. "A unified income tax policy should be implemented for domestic and overseas-funded enterprises as soon as possible."
   
The actual income tax rate has remained at 14 percent for overseas-funded businesses, far lower than the 24 percent norm for domestic firms, since China formulated the preferential policy for overseas-funded firms in mid-1980s in a bid to allure foreign investment.
   
When China merges the income tax regime, there should be no grace periods for overseas firms, Wang said, adding that grace periods themselves indicate a kind of bias against domestic businesses.

(Xinhua News Agency March 13, 2005)