Farming Cost Lowered Greatly with Rural Tax Reform in China

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Last updated at: (Beijing Time) Tuesday, June 03, 2003

Farming Cost Lowered Greatly with Rural Tax Reform in China

Liu Wenbao, a farmer from northeast China's Jilin Province, is not worried about the cost of his spring farming this year.

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Liu Wenbao, a farmer from northeast China's Jilin Province, is not worried about the cost of his spring farming this year.

The rural tax reform in Jilin has cut Liu's per hectare tax by 200 yuan (24.2 US dollars), about eight percent of his farming cost for one year.

"With lower taxes, I can spare more money for fertilization," said Liu, who is from Kaian Town, Nong'an County of Jilin.

The farmer was always worried about his various taxes and fees before and could barely make a profit.

Rural tax reform is a measure by the Chinese government to relieve its 900 million farmers of unreasonable burden of taxes and fees. After a three-year pilot program, the central governmenthas decided to spread it all over the country.

Jilin, as a big base of grain production in China, was one of the pilot provinces for the reform. In 2000, the province's two pilot counties saw a reduction of 16.7 and 43 percent in taxes andfees paid to the government respectively for their farmers.

"The reform cuts off administrative fees and sets up a reasonable tax collection standard, which effectively prevents over-taxation," said Li Zhongliang, an official in charge of finance and economic affairs in the province.

Statistics from the Jilin provincial government show that, owing to the reform, the average tax of every farmer reduced from 139 to 99 yuan (12 US dollars) and the average tax per hectare reduced from 530 yuan (64 US dollars) to 377 yuan (40.7 US dollars).

The average tax reduction for every farmer was 30-40 yuan (around 4 US dollars) in regions implementing the tax reform, said Chen Xiwen, deputy director of the Development Research Center of the State Council.

Apart from the tax reduction scheme, the government has also exerted great efforts to make tax collection transparent.

He Mingkun, a farmer from Yushu City in Jilin, is quite happy with the reform.

"We were ignorant of the tax collection standard in the past, but now all the taxes are clear to us," said He.

The Jilin provincial government also has taken measures to increase farmers' income while lowering the farming cost. To reachthis goal, a pilot program has been launched in the province to transfer government allowance from grain trading directly to farmers.

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