BEIJING (AFX-ASIA) - China's new corporate income tax law will be submitted
to the State Council, the country's cabinet, in June and is expected to be
reviewed by the National People's Congress, China's parliament, next March, the
Beijing-based Financial News reported, citing a tax official.
The corporate income tax law will unify the income tax rate for both
domestic and foreign-funded companies at 24-28 pct, the unidentified official
from the income tax department of the State Administration of Taxation said.
China currently has different regulations governing the corporate income tax
of domestic and foreign-funded firms, under which the foreign-funded ones enjoy
preferential income tax rates over domestic companies.
Experts are calculating how much the tax revenue will be reduced by a one
percentage point cut in the corporate income tax rate and, based upon this, will
decide an appropriate tax rate, the official said.
China has implemented a series of tax reforms in the past year. The export
tax rebate system has been changed, requiring local government to take more
responsibility, and a change from a production value-added tax system to one
based on consumption is also on trial in the northeast of the country.
Tax bureau figures show that in 2003 China collected a total of 304.64 bln
yuan in corporate income tax, of which 234.1 bln yuan came from domestic
companies and 70.5 bln from foreign-funded firms.
The country's total tax revenue for 2003 was 2.05 trln yuan, up 20.34 pct
year-on-year.
(1 usd = 8.3 yuan)
allen.feng@xinhuafinance.com
al/wpf
|