The notice, worked out by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs, explicates six preferential tax policies to be applied to western regions from January 1, 2001.

The notice, to be applied in 12 provinces, autonomous regions municipalities and three autonomous prefectures, rules that domestic enterprises and foreign invested companies will enjoy a preferential income tax rate of 15 per cent in their operation listed as the country's encouraged production for 10 years.

Domestic enterprises in ethnic minority areas can be exempted from income tax periodically and foreign ones can be totally exempted by provincial governments.

Enterprises with income of more than 70 per cent coming from investment in transportation, power sector, water conservancy and broadcasting will be free of income tax in the first two years of their operation and will be exempted 50 per cent of income tax for the next three years.

Imported facilities for enterprises' production supported by the country will be free of customs tariffs, said the notice.

Investors will be free of agricultural products taxes levied on forest and grass planted on former farm land for the protection of environment for ten years since the investors start making profit from the plants.

Provincial, autonomous regional and municipal governments have the final say on tax levied on the use of farm land in construction of State and provincial roads.

(China Daily February 21, 2002)