Agricultural tax is a traditional Chinese tax item, which has made tremendous contribution to the collection of China's financial revenue over the past half a century, but under the condition of a market economy, the levying of agricultural tax must be reexamined and readjusted.

An analysis of the actual result of agricultural tax in force for many years shows that the major defects of the fixing of value in the legislation of agricultural tax has led the establishment of a specific system and the efficiency in tax collection and management to an embarrassing situation. Analyzed from a legislative idea, agricultural tax, which was initiated in the planned economy, carries a very strong color of administrative interference. Due to the underdeveloped industrial and commercial industries at that time, agricultural tax became the main source of state revenue. After the Third Plenary Session of the 11th CPC Central Committee, although the agricultural tax law had been revised several times, the legislative idea, which stressed government interference and collection of financial revenues for local governments remained unchanged. Against the background of a market economy, overstress on implementation of the rule of government intervention can no longer meet actual needs. A market economy requires an agricultural tax legal system that matches market rules. Analyzed from the result of implementation, agricultural tax collection over many years has brought about rich source s of revenues for the government, but it is also one of the causes of the problem relating to farmers, rural areas and agriculture. Examined in accordance with the neutral principle for tax collection, agricultural tax and the charge of various kinds of fees have burdened farmers beyond their sustainability and have led to the serious lagging in the adoption of market rules in the agricultural field, thus hindering the effective allocation of agricultural resources.

Fairness is the soul of the taxation system under the socialist market condition. Fair value in the tax law includes horizontal and vertical fairness. Horizontal fairness refers to people with the same taxpaying capacity who should shoulder the same tax burden. Vertical fairness refers to people with different tax-paying capacity who should be given different tax burden. In China's current regulations on agricultural tax, the omission of fair value is not expressed between different agricultural taxpayers, but is placed within the framework of the entire income tax for examination, there exists great unfairness between agricultural tax payers and other income tax payers. Firstly, unfairness fixed on the basis for tax collection. For example, while calculating the tax on urban residents' gain from wage or salary, there is a fixed amount of exempted tax which is internationally called "living cost", this means that the state, while participating in the distribution of national income, should pay attention to the nationals' basic needs of livelihood. The value of tax exemption is set at 800 yuan in the overwhelming majority of China's provinces. Although a light tax policy has always been stressed in the legislation of agricultural tax, with regard to farmers' living cost, thus far there is no stipulation in the current regulations on agricultural tax. Secondly, the determining of the taxable capacity of different taxpayers is obviously unfair. The tax burden is imposed by personal income tax on different income strata is determined by relying on progressive tax rates. The regulations on agricultural tax neglect the taxable capacity of tax payer, a unified tax rate is adopted for all in the same region. Thirdly, the agricultural tax rate is higher than that of other tax items. Compared with other income taxes, the average agricultural tax rate is basically at the medium-high level, though they are same income tax payers, the relative tax burden of agricultural tax payer far exceeds payers of other tax items. The void of a fair value is the main cause of the defects in the agricultural tax system, as well as one of the main root causes of the problem relating to farmers' burden.

The omission of value in the legislation of agricultural tax has brought a vicious cycle on agricultural tax. On the one hand, the share of agricultural tax income in the total financial revenue is getting lower and lower, and the proportion of agricultural expenditure to financial expenditures faces the tendency of decreasing year by year. On the other hand, even if social and political costs are not counted, in terms of pure tax levying cost, due to the burden of tax and fee, the situation of rural farmland being laid waste is quite serious, furthermore, the possibility for farmers to declare tax payment on their own is very slim, this has resulted in an extremely high cost of agricultural tax collection. Analyzed either from the theoretical level or from the practical level, it has become a necessity to abolish agricultural tax or replace it by another tax category.

Of course, abolition of agricultural tax only implies that a tax category unfavorable to the settlement of the problem regarding farmers, rural areas and agriculture will fade out of the historical stage, it does not mean that farmers are not required to pay any tax, otherwise would only mean an over-correction on the question of fair value. There are three main methods for the collection of agricultural tax abroad: First, agricultural products are the objects of tax levying, the collection of turnover tax as represented by Britain and the United States; second, profits from agriculture are the objects of tax collection, the levy of income tax as represented by the Republic of Korea (ROK) and Turkey; and third, land is the object of tax levying, land tax or property tax is levied on farmland as represented by Russia. In terms of China, the first and second methods set very high demands on a country's level of tax collection and management, the monitoring degree of property, the way of transaction and the nationals' taxpaying consciousness, otherwise they may cause the loss of huge amounts of tax income and high tax collection cost, thereby affecting the authority of the tax law. Adoption of the third method, i.e., the levying of tax on farmland is relatively in conformity with China's reality, the reasons are: Firstly, China's land is state-owned and collectively owned, other main land used also needs to bear appropriate tax burden and there is no except for farmers; secondly, land tax generally is that quota tax rate and low tax help lighten burden on farmers; thirdly, the usage of farmland tax can change the professional nature of agricultural tax, it is applicable to all mainstays using farmland and so is conducive to giving expression to fair value; fourthly, levying tax on farmland helps the government use the taxation macro-control means to protect arable land resources; and fifthly, Chinese farmers' self-taxpaying awareness needs to be enhanced, rejecting the first and second tax-collection methods and adopting the third method are pragmatic and appropriate choice for China.

In addition, although the question regarding whether a gradual reduction of tax rate or a one-time cessation of levying method should be adopted in respect to the abolition of agricultural tax is merely a technical issue, however, since it involves the arrangement of local financial funds and affects implementation of this reform measure for the abolition of agricultural tax, it should receive the high attention of the decision-making level. A fixed number of years should be defined for the abolition of agricultural tax. If this is to be connected with WTO rules, scholars are inclined to fix it at five years. Meanwhile, in order to reduce vibration to financial revenue, the abolition of agricultural tax should not be in place at one stroke, rather tax should be lowered year by year till tax ceases to be levied in the final year. Doing so facilitates local finance's self-digestion and avoids the strong resistance in the course of policy implementation.

By People's Daily Online