Municipality aims to stimulate local economy through rebates
BEIJING - Tianjin is joining a number of coastal cities, including Shanghai and Shenzhen, that have announced their plans to set up the country's next tax-rebate zone. That's after the tropical Hainan Island was given the green light to provide tax-refunds on products in April.
In the city's three-year plan, the Dongjiang Free Trade Port Zone of Tianjin will be transformed into a tax-free island offering tax refunds to tourists, once its application has been approved, according to Huang Xingguo, mayor of Tianjin, who was quoted in the Securities Daily on Saturday.
The zone, located at Binhai New Area, a government-designated economic zone 45 minutes' drive from downtown Tianjin, is the country's largest bonded port by size.
Situated adjacent to Beijing and Tianjin, where consumption is robust, the proposed tax-free zone would be easily distinguishable from non-tax-free areas. It also has existing advantages in logistics and other facilities, Yu Rumin, chairman of the board of Tianjin Port (Group) Co Ltd, told the newspaper.
Tax-free luxury goods available to increasingly affluent Chinese within the country have created many opportunities for tourism and retail services.
China is poised to become the world's largest market for luxury goods by 2020, according to a report from the brokerage and investment group CLSA Asia-Pacific Markets in February. The country will account for 44 percent of global sales over the next decade, up from 15 percent at present, the report said.
Experts believe that tax rebate policies in more designated sites will stimulate domestic demand.
Eyeing the profits from tax-free retail businesses, the country's financial hub Shanghai was reported in May to be working on plans to make its Pudong New Area District a tax-free zone.
Coastal port cities such as Zhoushan in Zhejiang province in the east of the country, and Zhuhai and Shenzhen in Guangdong province in the south, have also prioritized a tax-rebate plan to fuel tourism and their local economies.
Hainan Island, the first province to implement a program of tax rebates, had seen about 40,000 tourists granted rebates on around 150,000 products by May 20.
The island has set a rebate cap on goods priced at no more than 5,000 yuan ($772) for each person for each visit from designated shops.
The policies apply to tourists from both home and abroad who fly on to other destinations in China from the island.
Each traveler can claim a rebate twice a year, while residents of the island can claim once a year.
The program, based on similar programs at Jeju Island in South Korea, and Okinawa, Japan, echoed the State Council's goal to build Hainan into a top international tourism destination by 2020.
Source: http://www.chinadaily.com.cn/business/2011-06/07/content_12650502.htm

(China Daily)
Updated: 2011-06-07 14:31

BEIJING - Tianjin is joining a number of coastal cities, including Shanghai and Shenzhen, that have announced their plans to set up the country's next tax-rebate zone. That's after the tropical Hainan Island was given the green light to provide tax-refunds on products in April.
In the city's three-year plan, the Dongjiang Free Trade Port Zone of Tianjin will be transformed into a tax-free island offering tax refunds to tourists, once its application has been approved, according to Huang Xingguo, mayor of Tianjin, who was quoted in the Securities Daily on Saturday.
The zone, located at Binhai New Area, a government-designated economic zone 45 minutes' drive from downtown Tianjin, is the country's largest bonded port by size.
Situated adjacent to Beijing and Tianjin, where consumption is robust, the proposed tax-free zone would be easily distinguishable from non-tax-free areas. It also has existing advantages in logistics and other facilities, Yu Rumin, chairman of the board of Tianjin Port (Group) Co Ltd, told the newspaper.
Tax-free luxury goods available to increasingly affluent Chinese within the country have created many opportunities for tourism and retail services.
China is poised to become the world's largest market for luxury goods by 2020, according to a report from the brokerage and investment group CLSA Asia-Pacific Markets in February. The country will account for 44 percent of global sales over the next decade, up from 15 percent at present, the report said.
Experts believe that tax rebate policies in more designated sites will stimulate domestic demand.
Eyeing the profits from tax-free retail businesses, the country's financial hub Shanghai was reported in May to be working on plans to make its Pudong New Area District a tax-free zone.
Coastal port cities such as Zhoushan in Zhejiang province in the east of the country, and Zhuhai and Shenzhen in Guangdong province in the south, have also prioritized a tax-rebate plan to fuel tourism and their local economies.
Hainan Island, the first province to implement a program of tax rebates, had seen about 40,000 tourists granted rebates on around 150,000 products by May 20.
The island has set a rebate cap on goods priced at no more than 5,000 yuan ($772) for each person for each visit from designated shops.
The policies apply to tourists from both home and abroad who fly on to other destinations in China from the island.
Each traveler can claim a rebate twice a year, while residents of the island can claim once a year.
The program, based on similar programs at Jeju Island in South Korea, and Okinawa, Japan, echoed the State Council's goal to build Hainan into a top international tourism destination by 2020.
Source: http://www.chinadaily.com.cn/business/2011-06/07/content_12650502.htm

Survey finds more than 50 percent of respondents want to see increase
BEIJING - Officials and experts have urged the Chinese government to raise the individual income-tax threshold.
In a survey of 100 officials and economists, conducted by the web portal 163.com, 55 suggested that the threshold should be set at 5,000 yuan ($770), rather than the 3,000 yuan figure proposed in a draft amendment by the State Council.
Wang Tongsan, head of the Institute of Quantitative and Technical Economics at the Chinese Academy of Social Sciences, said that in order to reduce the burden on the low-income group and encourage domestic demand, a higher threshold is needed.
That view won support from an adviser to the People's Bank of China. "The proposed threshold could be raised to 5,000 yuan, especially for high-income regions, such as Shenzhen in Guangdong province," said Li Daokui, who believes that the current individual income tax system will not solve the problem of income disparity.
However, a higher tax threshold would result in a loss of more than 109 billion yuan in government tax revenue, according to a statement from the Ministry of Finance.
The State Council published a draft of tax law reforms on April 25. The government plans to launch a second review of the draft in June, and is likely to introduce a new threshold and tax rates in the second half of this year, according to the State Council.
Ping Xinqiao, a professor at the School of Economics at Peking University, said that a threshold of 3,000 yuan would be "reasonable". "At this figure, less than 20 percent of the working population would pay tax, which is almost the minimum number required to maintain a healthy fiscal system," he said.
There is also a debate on reduction of the number of individual income tax brackets - 39 of those surveyed by 163.com said that the number should be reduced from nine to five, rather than the proposed seven.
A five-bracket system, with a wider range between each bracket, would help to solve wage disparity, according to Jia Kang, head of the Institute of Fiscal Science, a think tank affiliated to the Ministry of Finance.
He also suggested an acceleration in reform of the levy, based on a family's income, rather than individuals, a proposal that has not been included in the published draft.
Source: http://www.chinadaily.com.cn/business/2011-05/26/content_12581886.htm

By Chen Jia (China Daily)
Updated: 2011-05-26 09:20

BEIJING -- China has started reviewing the anti-dumping measures it imposed in 2006 on catechol imported from Japan and the United States, the Ministry of Commerce (MOC) said Wednesday.
The MOC will examine the possibility of continuing the anti-dumping measures and evaluate any possible damage that might result if the measures are discontinued, according to a statement on the MOC's website.
The Lianyungang Sanjili Chemical Industry Co, Ltd filed an application for the re-examination of the measures on March 21 on behalf of China's catechol producers, the statement said, adding that the review should be completed before May 22, 2012.
China slapped a five-year anti-dumping duty of 4 percent to 46.81 percent on catechol imports from the United States and Japan on May 22, 2006.
Catechol is a chemical material that can be used as an antiseptic or photographic developer.
Source: http://www.chinadaily.com.cn/business/2011-05/26/content_12581816.htm

(Xinhua)
Updated: 2011-05-26 09:15

LONDON - Sales of Chinese antiques surged by 180 percent in London this month, as owners profited from a boom in demand for Imperial items by an increasing number of dealers and agents visiting the United Kingdom.
The capital's main auctions fetched a record 58 million pounds ($93.9 million), almost three times the 20.6 million pounds achieved last May, according to Bloomberg calculations.
Asian antiques are threatening to usurp Old Masters as the third biggest-selling category of the West's auction market. Impressionist and modern works are in first place and contemporary works in second.
"The number of new millionaires in Asia is shooting up," Charles Dupplin, a partner at the London-based insurer Hiscox Plc, said. "So too is the number of them who want to buy art. I can't see anything that will hold this back. The client base that buys Old Masters is pretty constant and there is a problem with supply."
Asian dealers visited regional auction houses in Dorset and Wiltshire after London sales by Sotheby's, Christie's International and Bonhams. In December, the three houses' equivalent auctions of Old Masters, the traditional mainstay of the European art trade, tallied 48.4 million pounds.
Multiple-estimate auction prices for stand-out Imperial pieces, and the sheer volume of other smaller transactions, have helped turn the trade in Chinese antiques into a global business with an annual value exceeding $10 billion.
"Last year, Oriental art accounted for more than 50 percent of our turnover," Guy Schwinge, director of Dorchester-based Duke's, said in an interview. "Five years ago it would have been less than 10 percent. It can all be put down to the insatiable desire of the Chinese to repatriate works that have left their country over the last 300 years."
More than a dozen Asian dealers and agents went to Duke's on May 19 for an 86-lot sale. The event included 11 pieces looted from Beijing in 1860, when Captain James Gunter of the King's Dragoon Guards was among the British troops who overran the Old Summer Palace.
Among the "Treasures from the Old Summer Palace" being sold by Gunter's descendants was an 18th-century Qianlong-period (1736-1795) yellow jade pendant carved in the shape of a dragon.
Similar in style to an Imperial jade scepter that fetched 1.3 million pounds at Bonhams on May 12, the 5-inch-wide pendant sold for 478,000 pounds to a telephone bidder. It had been valued at 50,000 pounds.
"Although this was the best quality 18th-century Imperial art and provenance, the color was a bit too green and pale," Hai-Sheng Chou, a Taiwan-based dealer, said. "If the color had been more yellow it would have made more than 600,000 pounds."
A Qianlong-period white jade cup and saucer was also among the objects Gunter took from the Old Summer Palace. Notable for the purity of its color, this was bought in the room by the London and New York-based dealers Littleton & Hennessy, bidding for a client, at 513,850 pounds against a high estimate of 200,000 pounds. The UK's regional auction houses have become a favorite hunting ground for Chinese buyers.
On May 18, the Salisbury auction house Woolley & Wallis offered a Qianlong period Imperial white jade teapot that had been in UK private collections since the mid-19th century. Estimated at 200,000 to 300,000 pounds, this sold to a Hong Kong telephone bidder for 2.1 million pounds.
Bloomberg News
Source: http://www.chinadaily.com.cn/business/2011-05/23/content_12558970.htm

By Scott Reyburn (China Daily)
Updated: 2011-05-23 10:00

Beijing is likely to begin property tax reforms as soon as the second half of 2011, China Securities Journal reported on Friday.
The report said the Beijing government has held a briefing with local officials and urged them to take the lead in backing the policy by declaring their personal assets first.
The report also said the new policy might be a sign that China will begin nationwide property tax reforms following a pilot program, according to an expert from Ministry of Housing and Urban-Rural Development.
The first-tier cities are prepared now for the new tax, the expert said.
East China's Shanghai and Southwest China's Chongqing piloted in property tax reforms from the end of January in order to curb high housing prices.
Source: http://www.chinadaily.com.cn/business/2011-05/20/content_12549477.htm

By Ben Yue (chinadaily.com.cn)
Updated: 2011-05-20 13:50

BEIJING - China's recent proposals for the reform of the income tax system has prompted a nationwide debate about whether wage earners are paying too much to the government.
For most Chinese, the answer is an absolute "yes", according to a recent research by the Central University of Finance and Economics, a top financial college.
Released on Sunday, the report said that China's current tax burden is heavier than many middle-and upper-income countries.
The conclusion of the research was that the government should reduce tax rates while increasing input in crucial areas such as healthcare and education.
"In 2009, the average income for each person in China was only $3,700 and the current tax burden is too high," the report said. The research said that a country's tax burden should be in line with the level of its economic development.
According to a previous survey from the World Bank, the most suitable tax rate (the percentage of taxation revenue accounts in a country's overall GDP) for low-income countries (where the average annual personal income is below $260) should be 13 percent.
For middle-income countries, where average annual personal income is $2,000, the suggested tax rate is 23 percent. With an average personal income of $10,000 in high-income countries, the proposed tax rate is 30 percent. However, studies of China's tax burden revealed a lack of accuracy.
In August 2010, the Ministry of Finance told the media that China's tax rate was 24 percent in 2007, 24.7 percent in 2008 and 25.4 percent in 2009.
However, a report from the Chinese Academy of Social Sciences indicated conflicting data, showing that the tax rate was 31.5 percent in 2007, 30.9 percent in 2008 and 32.2 percent in 2009.
Since economic reforms in 1978, the government has gradually reduced subsidies in crucial areas such as healthcare, education and housing, where the Chinese population had previously enjoyed full coverage from the government under the planned economy.
However, the country has failed to establish an alternative system, including revision of the taxation system to protect the interests of the low-income groups.
Last month, the Chinese Cabinet proposed raising the annual personal income tax threshold from 2,000 yuan ($306) to 3,000 yuan, in a bid to boost domestic demand and reduce the burden on wage earners. The proposal is now open to suggestion from the public.
Commenting last week, Li Daokui, an adviser to the People's Bank of China, dismissed the proposal as "silly". He said the current tax system has failed as an instrument for effectively dealing with income disparity.
Jia Kang, head of the Research Institute for Fiscal Science, which is affiliated to the Ministry of Finance, said the amendment to the tax law is the government's response to growing public concern over inflation.
Source: http://www.chinadaily.com.cn/business/2011-05/10/content_12477610.htm

By Wang Xing (China Daily)
Updated: 2011-05-10 09:22

BEIJING - China's leading think tank on Thursday released a report suggesting spreading the real estate tax levy from the current two cities of Chongqing and Shanghai to other parts of the country in the forthcoming five years.
The proposal was voiced by the Chinese Academy of Social Sciences (CASS) in its annual report on China's real estate sector. It came as the country has adopted a series of measures since last year to tame housing prices, including higher down payment requirements, raising interest rates, third-home purchase bans.
The CASS believed that spreading the property tax levy to the whole country would help create a sustainable source of revenue for local governments through advancing taxation of property possession, and would help curb the soaring home prices and narrowing the income gap between the rich and poor.
"The collection of property taxes will not only help guide reasonable spending on housing, but also help curb a gap in distribution of wealth and income," said the CASS, "Such move will also encourage local governments to change from depending on sales of land for revenue to relying on taxes for revenue."
Chongqing in southwest China and Shanghai on east China's seaboard are the first two cities in the country to have a trial run of property tax early this year.
The CASS stressed the importance of setting the threshold and targets for property tax levy in a scientific and appropriate manner, and of incorporating taxes and fees in real estate development and transaction.
Source: http://www.chinadaily.com.cn/business/2011-05/06/content_12459333.htm

(Xinhua)
Updated: 2011-05-06 13:42

China's planned resource tax on the sale of oil and gas may be as high as 10 percent, Bloomberg reported Thursday citing the Shanghai Securities News.
The government may levy a tax of 5 percent to 10 percent of sales value, according to an amendment to temporary regulations on the matter, the newspaper reported, without giving details on a timeframe or geographical regions for implementation.
China has proposed a nationwide resource tax to raise funds to develop the poorer western regions, which are rich in oil, gas and coal reserves. The government first introduced a trial tax of 5 percent in Xinjiang Uygur autonomous region in June, which it widened to other western provinces a month later.
Coal will still be taxed by volume rather than price levels and the tax may be raised to between 0.3 yuan and 8 yuan a ton from 0.3 yuan to 5 yuan, the newspaper said, citing the amended rules.
Nationwide introduction of the taxes may be delayed because of inflation concerns, the Shanghai-based newspaper reported, citing unidentified people.
Source: http://www.chinadaily.com.cn/business/2011-05/05/content_12450647.htm

(Agencies)
Updated: 2011-05-05 11:05

Proposal will let wage earners keep larger slice
BEIJING - Taxpayers may be able to keep more of their income under a proposal submitted by the State Council to the nation's top legislature.
The Chinese Cabinet's proposal aims to raise the personal income tax threshold from 2,000 yuan ($306) to 3,000 yuan in a bid to boost domestic demand and reduce the burden on wage earners.
The draft amendment, presented to the Standing Committee of the National People's Congress, also proposed a reduction in the number of income tax brackets from nine to seven.
Xie Xuren, minister of finance, told the top legislators on Wednesday that if the plan is approved it will reduce the government's tax revenue by 109 billion yuan this year.
Lawmakers will review the draft amendment to the Individual Income Tax Law from Wednesday to Tuesday, the third revision since the law was introduced in 1980.
The move is part of the government's recent efforts to tackle income disparities and respond to public concern over surging living costs.
"The amendment is designed to reduce the tax burden for most salary earners while moderately increasing the taxation rate for those on a high income," Xie said.
He said only about 12 percent of low income earners will have to pay tax if the threshold is lifted, down from the current 28 percent.
The government said earlier that the draft amendment to the tax law will be open for public solicitation on April 25. A second review will start as early as June and the new tax rate, once agreed, is likely to be introduced in the second half of this year, it said.
Xie said on Wednesday that revenues from personal income tax totaled 483.7 billion yuan in 2010, up from 41.4 billion yuan in 1999, accounting for 6.3 percent of the country's tax haul.
Jia Kang, head of the Research Institute for Fiscal Science affiliated to the Ministry of Finance, told China Daily in an interview that the tax law amendment is the government's response to increasing public concern over inflation.
"Inflation has increased difficulties for many, especially those in the low-income group," he said, noting that the current revision is expected to encourage consumer spending.
China introduced its individual income tax law in 1980 and raised the threshold to 1,600 yuan a month from 800 yuan in 2006 and then increased it to 2,000 yuan in 2008.
But the threshold increase lagged behind rising consumer prices. According to the National Bureau of Statistics, food prices surged 7.2 percent last year. Prices for new apartments also surged about 14 percent during the same period.
In March, the consumer price index hit a 32-month high of 5.4 percent. Analysts estimate that the figure is expected to continue to increase in the next few months.
Wang Xiaolu, deputy director of the China Reform Foundation's national economic research institute, said the tax revision is a good start in curbing the growing income gap.
But he also said that the best way to increase national income would be a comprehensive reform of the fiscal, taxation and administrative systems.
Wang conducted a controversial study last year showing that, if hidden income was taken into consideration, the income gap is far wider than earlier estimated.
Zhao Yinan contributed to this story.
Source: http://www.chinadaily.com.cn/business/2011-04/21/content_12367146.htm

By Wang Xing (China Daily)
Updated: 2011-04-21 09:14

BEIJING - China's taxation authorities have ordered local bureaus to plug loopholes in the country's collecting of personal income taxes from high-income citizens by strengthening coordination with other departments.
Income from the transfer of equity and houses, derived from auctions, interest returns, stock dividends and bonuses would become the main targets of taxation improvements, said the State Administration of Taxation (SAT) in a statement on its website.
The STA said it would enhance cooperation with administrations for industry and commerce to step up taxation on transfer of equity in non-listed companies, and work with various departments to improve taxation on transfer of equity in listed firms.
"Taxation authorities should enhance contact with auction houses in order to be given information about the sources of income derived from auctions and urge auction houses to pay taxes on behalf of income owners," said the STA.
Tax authorities would also trace the income of investors of enterprises that have continuously made profits without distributing stock dividend or bonuses, the STA said in a statement on its website.
Source: http://www.chinadaily.com.cn/business/2011-04/18/content_12345440.htm

(Xinhua)
Updated: 2011-04-18 13:39

HONG KONG - Hong Kong Land Registry Monday announced that the number of sale and purchase agreements for all building units received for registration in March was 13,501, up 8.9 percent on February and 6.3 percent on March last year.
The 12-month moving average for March was 13,337, up 0.5 percent on the 12-month moving average for February and 4.2 percent on that for March last year.
The total consideration of sale and purchase agreements was HK$69. 4 billion ($8.92 billion), up 26 percent on February and 19.4 percent on March last year.
Among the sale and purchase agreements, 10,456 were for residential units, up 0.6 percent on February but down 3.7 percent on March last year.
The total consideration for sale and purchase agreements in respect of residential units was HK$51.9 billion, up 13.7 percent on February and 7.3 percent on March last year.
Source: http://www.chinadaily.com.cn/business/2011-04/05/content_12274785.htm

(Xinhua)
Updated: 2011-04-05 11:20

State Council to deliver a proposal for raising threshold for payments
BEIJING - China's State Council will present a proposal to the National People's Congress on raising the personal income tax threshold and adjust taxation brackets.
The move is aimed at allaying public concerns over inflation and easing the tax burden on individuals.
Raising the threshold and streamlining tax brackets will increase domestic consumption and improve living standards, analysts said, although the country's cabinet didn't disclose details of the reforms or cite a timeframe for them to come into operation.
"If the lowest tax bracket starts at 3,000 yuan ($456), approximately 20 percent of working people will be liable for income taxes, a reduction from the current 50 percent," said Ping Xinqiao, a professor from the School of Economics at Peking University.
"At present, the majority of taxpayers are from the low- and middle-income groups," he said.
Ping called on the government to use the family as the basic unit for an income tax levy as soon as possible, and said the policies should take into account the different circumstances facing families, including the ages of family members, and educational and living costs.
"Tax policies should be in line with the changing economic conditions and come as a response to soaring inflation," said Zhang Deyong, a researcher from the Institute of Finance and Trade Economics at the Chinese Academy of Social Sciences.
Jia Kang, head of the Institute of Fiscal Science, a think tank affiliated to the Ministry of Finance, said that an increase in the threshold won't improve income distribution while wages remain low, and he argued that "high earners should contribute more in tax revenues."
Jia suggested the government should reduce the current nine tax brackets to five, expanding the range of each bracket and relieving pressure on those in the low- and middle-income groups.
A rise in the personal income tax threshold would benefit the middle- and low-income groups, said Premier Wen Jiabao on Sunday in an online chat with the public.
Xie Xuren, minister of finance, said the government will gradually push the reform of income tax and implement structural reductions in tax rates and thresholds.
The last rise in the personal income tax threshold came in March 2008, when the lowest level threshold was introduced for those earning 2,000 yuan a month from the previous figure of 1,600 yuan.
Analysts said that the changes failed to reflect the variable increases in wages and a rise in consumer prices
In 2010, China's budget deficit was equal to 2.5 percent of gross domestic product with a national debt of less than 20 percent that been contained "within a safe range", said Xie.
The country's inflation rate rose 4.9 percent in January from a year earlier and food prices increased 10.3 percent year-on-year because of a drought in major grain producing regions.
Public concerns over inflation and low wages have put pressure on the government to ease the burden on taxpayers.
The nation's tax system will undergo a major reform in the next five years as domestic consumption is expected to become the engine for economic growth.
Source: http://www.chinadaily.com.cn/business/2011-03/03/content_12107975.htm

By Chen Jia (China Daily)
Updated: 2011-03-03 09:50

BEIJING - An executive meeting of China's State Council, the Cabinet, approved Wednesday the draft plan to amend the personal income tax law and a plan to accelerate development of the Chengdu-Chongqing economic zone.
The draft plan, aimed at benefiting middle and low-income groups, will be submitted to the Standing Committee of the National People's Congress, according to a document released after the meeting, which was presided over by Premier Wen Jiabao.

The document said that by 2015, the Chengdu-Chongqing economic zone will become an important economic powerhouse and a national industrial base.

Source: http://www.chinadaily.com.cn/business/2011-03/02/content_12104998.htm

(Xinhua)
Updated: 2011-03-02 17:23