Companies want Beijing to ease tax burden
Beijing has been promising reforms since 2004, and hard-pressed companies are tired of waiting
As the annual session of the National People's Congress and a government reshuffle draw nigh, millions of business executives and wealthy individuals are hoping the new cabinet equates tax reform with tax cuts.
Beijing put forward a tax-cut plan in 2004, using the term "structural tax reform", hoping it could ease the tax burdens on companies and individuals.
However, the cabinet led by outgoing Premier Wen Jiabao adopted a go-slow approach to tax reform because of worries that drastic cuts would leave a big hole in revenue.
That revenue has grown in leaps and bounds in the past decade, in what the government says is an indicator of a buoyant economy, and topped 10 trillion yuan (HK$12.4 trillion) last year, up 12.1 per cent year on year.
"The central government is using all means to chase an overall increase in tax revenue," said Zhang Jiyong, a Shanghai-based auditor. "Businesses are increasingly feeling the pressure from the tax authorities to pay more."
The central government is using all means to chase an overall increase in tax revenue. Businesses are increasingly feeling the pressure from the tax authorities to pay more
Beijing abolished its agricultural tax in 2006, before raising the threshold for personal income tax from 2,000 yuan to 3,500 yuan in September 2011 - two measures to ease the tax burden on individuals.