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 | Saturday, April 22, 2000, updated at 12:04(GMT+8) | ||||||||||||
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China Ready to Enact Inheritance TaxChina is now ready to enact the inheritance tax, a senior tax expert said April 21.Deputy director of the Taxation Science Research Institute under the State Administration of Taxation (SAT) Liu Zuo told Xinhua that the time is ripe to start collecting inheritance taxes. From the founding of New China in 1949 until 1990, China twice introduced the inheritance tax, but failed to actually collect it. Liu said that things have changed greatly over the past decade with rapid economic growth, and the per capita income of the Chinese people is now more than 20 times of that of 40 years ago. The gap of income disparity has also widened. Some 20 percent of the population now holds more than 80 percent of all savings deposits in the country. Liu said that the current economic situation also requires that the government narrow the gap between rich and poor in order to maintain social stability and stimulate consumption. The aim of the inheritance tax is to curb the excessive growth of wealth among a small group of individuals, re-distribute social wealth, and increase fiscal revenues. Since the awareness of taxation is growing in China, the revenue from individual income tax also has been growing at a double-digit rate over the past few years. In order to create sound conditions for levying the inheritance tax, the government has imposed real name requirements on bank savings accounts, and is developing a standardized notary system. Liu said that only the richest one to three percent of the population will be subject to the tax, and the taxable part of an individual's inheritance will include both movable and immovable assets. The rate of this inheritance tax may be as high as 50 percent, he said. He said that income tax, property tax, and inheritance tax all will become important leverages in the governments attempt to adjust individual incomes.
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