Wen Jiabao

Faster abolition of agriculture tax signals support for farmers

PUBLISHED : Sunday, 11 April, 2004, 12:00am
UPDATED : Sunday, 11 April, 2004, 12:00am

A tax on farmers could be abolished within three years - two years ahead of the schedule promised by Premier Wen Jiabao last month - according to Chen Xiwen, deputy director of the office of the central financial work leading group.

In a report carried by the official China Daily yesterday, Mr Chen was quoted by a Ministry of Agriculture researcher as saying the 'farmers' agricultural tax is sure to be cancelled within three years'.

Mr Chen was speaking at a recent closed-door meeting of top officials. The central financial work leading group is headed by President Hu Jintao. Mr Wen is deputy head.

The plan to abolish the 5 per cent tax on cash crops other than tobacco over a period of five years was announced by Mr Wen during the second session of the 10th National People's Congress held last month.

The agricultural tax reportedly raises 30 to 40 billion yuan a year - about 5 per cent of the government's revenue.

Jiang Zhongyi, senior researcher at the Ministry of Agriculture, said the speedy implementation of Mr Wen's pledge had the unanimous support of provincial and local governments. Citing Mr Chen's remarks, he said: 'This is good news for rural people, who currently earn an average monthly income of about 200 yuan.

'The media has recently played a major role in changing the attitudes of some provincial and local governments, who were previously unwilling to scrap the tax.'

Tan Qiucheng, a researcher at the Chinese Academy of Social Sciences, said scrapping the agricultural tax was a drastic measure that would prevent the arbitrary collection of fees from rural people.

'It is also a measure to put more money into farmers' pockets by encouraging them to grow more grain and secure the country's grain security,' said Mr Tan.

Increasing the income of the country's 900 million farmers, and raising grain output, is high on the government's agenda.

This year it will earmark 10 billion yuan from its grain risk fund to subsidise grain farmers, alleviating the effects of falling output and slowing income growth.

Grain output has dropped by 5.8 per cent from 2002, reaching 430.65 million tonnes last year. It is expected to rise to 455 million tonnes this year.

Despite the faster removal of the agricultural tax, Mr Jiang said he was concerned the burdens of rural people could not be eased until the government structure was streamlined.

Statistics show that up to 35 taxpayers are needed to support one civil servant.

Such bloated bureaucracies are supported by imposing levies and taxes on rural people.