China's top legislature will deliberate two draft laws, one on
the protection of public and private property, and another that
unifies the tax rates of foreign and domestic firms, at the fifth
session of the 10th National People's Congress (NPC) which gets
underway next Monday.
Wang Zhaoguo, vice-chairman of the NPC Standing
Committee, said the two bills, if they are passed, will improve the
country's socialist market economy.
The much-debated draft property law has been through a record
seven readings since it was first brought to the country's top
legislature in 2002.
The draft property law states that the country's market economy
system will guarantee all market players equal legal status and
equal opportunity of development", and will protect public assets
and private property alike.
Well-informed sources say the latest revision of the property
law now covers the assets of collectively owned by towns.
Civil law experts say the draft property law is in line with the
essential spirit of Chinese constitution, and will help the
country's property protection system fit the market economy.
The less-controversial draft of the corporate tax law was
approved by the NPC Standing Committee in 2006, and is expected to
be promulgated in January 1, 2008 if approved by the top
legislature.
Currently, foreign companies in China's economic zones are taxed
at a rate of 15 to 24 percent, while domestic companies are taxed
at 33 percent.
The draft corporate income tax law, aimed to promote fairer
competition between foreign and domestic companies, sets the
unified income tax rate for both domestic and foreign companies at
25 percent.
Although some worry the unified tax rate may discourage foreign
investment, there is a consensus, including many foreign companies
in China that the rate is fair.
Finance Minister Jin Renqing says that foreign companies won't
be much affected by the new policy, as the draft law still sets a
preferential tax rate for high and new-technology companies in all
regions of the country at 15 percent, and foreign companies will
have a five-year grace period before being taxed at 25 percent.
Sources with the NPC Standing Committee believe that the
majority of representatives of the NPC will vote in favor of two
bills.
(Xinhua News Agency March 1, 2007)