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NPC deputies strive to realize full statutory taxation

By Xinhua writer Wang Zichen (Xinhua)    08:22, March 12, 2015

BEIJING, March 11  -- Zhao Dongling, a deputy to the National People's Congress, has made her own contribution to realize statutory taxation in the world's second largest economy in the future.

Currently, only three of China's 18 taxes are based on law. The remaining 15 were levied in accordance with interim provisions or regulations of the State Council.

But this will soon end. Two years ago, Zhao brought national attention to the issue after she, together with 30 other deputies, submitted a motion calling for an end to the State Council's levying of taxes at its own discretion.

The power to levy taxes was given to the State Council in a one-paragraph-long decision by the NPCin 1985 in order to give the cabinet more leeway in helping China shift from a planned economy to a market one.

The cabinet has since instituted 15 taxes, consolidating the government's sources of revenue, as state investment plays a significant role in China's economic growth.

But the practice has drawn controversy among the public.

Fuel tax, levied in accordance with an interim provision issued by the cabinet, saw three hikes in recent months, based on notices issued by the Ministry of Finance and the State Administration of Tax.

Many say it has prevented citizens from benefiting from the falling global oil prices, and has caused public discontent.

Zhao, a playwright from the country's eastern Shandong Province, with the other NPC deputies, submitted a motion titled "Terminate Authorizing the State Council to Formulate Interim Provisions or Regulations on Taxation" in 2013.

Later that year, the Communist Party of China Central Committee said in a reform decision that it would "implement the principle of statutory taxation."

Now, a third draft of the amendment to the Legislation Law has been put in front of the NPC, which says that taxes could only be levied or canceled in accordance with the law.

Compared with the second draft, however, some content had been removed, including the parts concerning what taxes would be levied, whom the taxes will be levied upon and tax rate.

Zhao was disappointed, fearing that this is an attempt to water down legislative power.

"This draft is more ambiguous than the last. I want to know why," she said in a discussion with fellow deputies.

Facing the same question at a live press conference on Tuesday, Zheng Shuna, deputy director of the Legislative Affairs Commission of the NPC Standing Committee said, some terms used in the second draft, including types of tax, taxpayers, reference for tax and tax rate, were regarded as not scientific by experts and were replaced by the current wording. Tax type includes all the basic elements including taxpayers, reference for tax and tax rate, which will all be decided by law.

"It's better to be exact," Zhao was not fully convinced, "ambiguity leaves room for all kinds of interpretations."

Whatever version is adopted in the end, lawmakers, including Zhao, agree they could not possibly churn out 15 tax laws to replace current State Council rules immediately.

Fu Ying, spokeswoman for the third session of the 12th NPC, told a press conference on Wednesday that China aims to realize full statutory taxation by 2020.

The NPC and its Standing Committee will play leading roles in legislation, said Zhang Dejiang, Chairman of the NPC Standing Committee, while deepening and expanding the deputies' function in their performance of duty.

The revisions addressing law-based taxation are expected to be finalized in the coming few days. For Zhao, it is biggest duty on her mind.

"My screenplays might be short-lived," she said, "but our efforts to realize full statutory taxation would have long-lasting impact."

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Du Mingming,Yao Chun)

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