Inheritance Tax Remains Off China’s Short Term Agenda
by Mary Swire, Tax-News.com, Hong Kong
29 September 2004

The Chinese tax authorities' recent decision to waive stamp duty on legal heirs but impose it on other beneficiaries who receive land and houses suggests that the government is not looking to impose an inheritance tax on its citizens – at least in the short term, according to a report from China Daily.

Whilst the State Administration of Taxation issued the stamp duty notice last week amid a domestic debate about the merits of an inheritance levy, Ni Hongri, a research fellow with the State Council's Development Research Centre, believes the government “has not put it (inheritance tax) on its work agenda.”

"Some believe that levying the tax would be a heavy blow to the country's rich and middle-class people, on whom the government is pinning high hopes to develop the economy," the paper quoted Ni as observing.

However, the possibility of an inheritance tax being imposed at some point in the future does not appear to have been ruled out.

Some experts, including those within the Ministry of Commerce, consider the levy necessary to iron out a growing inequality in wealth between rich and poor in China’s booming capitalist society.

“It (inheritance tax) should help encourage the rich to contribute more to the society. It should also help encourage the successors of the rich to continue to work hard," noted Ni.

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