China Considers Further Stamp Duty Cuts

by Mary Swire, Tax-News.com, Hong Kong

08 August 2002

Official Chinese newspaper the Liberation Daily yesterday said that China's Ministry of Finance is considering effectively halving stamp duties on stock trading to boost weak markets. Currently a 0.2% tax is levied on both sides of stock transactions, and the government is thinking about charging the tax only on sales, the report said.

'Plans to levy stock trading stamp duties only on sellers are now under consideration and waiting for the right time to be implemented,' the newspaper quoted a ministry source as saying. 'The move amounts to cutting the duties by half,' the newspaper said.

The government had already halved the stamp duty from 0.4% of the value of each transaction to 0.2% in an attempt spur investor interest in lacklustre mainland markets. Turnover on China's US$500 billion market has dropped as share prices fell by more than 25% from their peaks in mid-2001.

Government income from stamp duty fell 68.3% year-on-year to 12.3 billion yuan in the first half, according to official figures.

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