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China Continues Modernisation Of Tax Regime, Scraps Farm Tax Early

by Mary Swire, for LawAndTax-News.com, Hong Kong

26 December 2005

Speaking last week, China's Finance Minister, Jin Renqing revealed that the government would be abolishing the unpopular farm tax ahead of schedule, as part of a program of tax and economic reforms in China.

The 2,000 year-old tax has traditionally been disliked by the country's rural community because it is levied at a flat rate, whilst taxes imposed on city-dwellers are imposed in relation to profit levels.

Observers have suggested that the tax has contributed to the growing income gap between the country and the city, and have attributed various cases of civil unrest in recent years to anger over the the rural tax.

These factors, in conjunction with the negligible amount of revenue raised by the levy, have reportedly contributed to its early demise.

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