China Adjusts Taxation Policies ����A senior government official announced in Beijing January 6 that China has decided to adjust a number of taxation and revenue distribution policies effective on January 1. ����Minister of Finance Xiang Huaicheng told a press conference this morning that these taxation policies to be adjusted involve foreign-funded enterprises, imported goods and economic and technological development zones. ����According to Xiang, the policy of tax rebates for foreign-funded enterprises established before 1994 has been terminated, while the policy of "no levy, no rebates" on the exports by foreign-funded enterprises established before 1994 will be extended by two years to the end of 2000. ����He said that the import duty of 1,014 tax items in the categories of textiles, toys and forestry products will be lowered by 8-78 percent. ����Preferential taxation policies concerning some 50 economic and technological development zones have also been revised. ����Xiang said that in 1999 the Chinese government will also adjust and standardize the taxation policies governing processing trade. The export tax rebates for general trade will be gradually and selectively raised, while an overall clarification will be carried out on due tax break and exemption policies. ����He said that the termination of due preferential taxation policies and the cut of import duty will be conducive to further standardizing levy system, rationalizing revenue distribution relations and promoting the development of foreign trade, so as to provide a good social environment for enterprises' fair competition. ����China will adopt a positive financial policy and expand financial expenditure in 1999. Xiang said that last year the financial policies yielded good results in boosting economic growth and readjusting the investment structure, but warned that exports are still on the downslide which is accompanied by sluggish enterprise investments and consumption demand. ����He noted that if the financial expenditure was to be cut this year, it would be difficult to maintain a steady growth of the national economy. ����On the other hand, the devastating floods in many parts of China last summer have imposed a huge task of rehabilitation, and the reform of state-owned enterprises is now at a crucial stage, both calling for more financial expenditure this year, he said. ����As to taxation reforms, the reform on the levying system will be first carried out on roads and vehicles, which have been involved in serious illegal and irrational charging problems. ����He said that efforts will be made to implement the reform according to law as early as possible within this year. ����The financial authorities are also designing a plan for rural levying reform, which aims to clarify taxes and fees, rationalize revenue distribution and cut the burden on rural residents in three years, he said. ���� Economicnews 1999-01-07 Page2 Full Story in Chinese