Unified levy supported for domestic and foreign banks
The Ministry of Finance has pledged support for the merger of the two-tier corporate tax system for domestic and foreign financial institutions, mainland media reports say.
Quoting an official from the ministry's National Treasury Department, a report posted on the website of the official Economic Daily said this was the first time the ministry had responded to widespread calls from the domestic business sector urging a unified tax regime.
The Economic Daily is an affiliate of the State Council, the mainland cabinet. It also quoted another official from the ministry's Taxation Department as saying the merger was being discussed and a final blueprint had not yet been drawn up.
Beijing first revealed last year it planned to reform the corporate tax system, merging the two-tier corporate tax regime into a single rate. The government currently levies a 15 per cent tax rate on most foreign-invested enterprises and a 33 per cent rate on domestic firms.
Pushing through the proposal is proving difficult, however. Recent reports suggested the unified rate, expected to be about 25 per cent to 28 per cent, would appear by 2006.