January 16 saw announced the exemption of the agro-tax in the three provinces of Hunan, Jiangxi and Qinghai and so far 22 out from the 31 provinces, municipalities and autonomous regions in the Chinese mainland have announced the full stopping of levying the agro-tax. Experts say, the objective set by Premier Wen Jiabao a year ago about the exemption of agro-tax in a span of five years is going to be advanced for two to three years in the realization.

Around the New Year's Day this year, the provinces, municipality and autonomous region of Guangdong, Jiangsu, Henan, Zhejiang, Sichuan, Shanxi, Hainan, Ningxia, Guizhou, Chongqing and Anhui announced one after the other to fully release the levying of the agro-tax at the beginning of 2005, offering myriads of farmers a lavish "New year gift". And as persons concerned with the State Tax Administration expect there will be some other provinces and autonomous regions to announce the exemption of the agro-tax prior or after the Spring Festival.

As Lou Jiwei, Vice minister of the Ministry of Finance once expressed at an economic forum held in Beijing not long ago, the full cancellation of the agro-tax as planned by the central government would be advanced, and an optimistic view by Gao Peiyong, Deputy director of the Finance and Trade Institute of the Chinese Academy of Social Sciences held that the central government would be likely to fully cancel the levying of agro-tax within the year, an advancement of 3 years as against the original plan.

The nationwide reform of taxes and fees would be pushed continuously forward this year, expressed Xie Xuren, Director general of the State Tax Administration last week, with the scope for exemption of the agro-tax expanded in order to reinforce the reduction of the levying of agro-tax.

In order to raise the initiatives of farmers in the cultivation of grain and reduce their burdens Premier Wen Jiabao announced March last year that the agro-tax would be called off within a time-span of five years. Immediately afterwards, the Ministry of Finance suggested that the Heilongjiang and Jilin provinces be made the experimental areas for the exemption of agro-tax (Tibet Autonomous Region has been enjoying the privilege of the exemption from agro-tax ever since the liberation of Tibet), with 11 provinces and regions having their agro-tax lowered three percent and the rest areas lowered one percent while those areas along the coastal lines and other areas with sufficient conditions were encouraged to take the lead in the agro-tax reform. The five provinces and municipalities of Shanghai, Beijing, Tianjin Zhejiang and Fujian made an immediate echo to have their agro-tax exempted or basically exempted.

Statistics indicate that by way of exemption of the agro-tax or reducing the tax-rate last year witnessed a reduction of around RMB 28 billion yuan agro-tax burden off from the farmers, a popular reduction of over 30 percent for farmers. But before the agro-tax reform the state levied some 60 billion yuan of agro-tax every year.

In history the agro-tax has always been an important source of financial revenue. At the beginning of the establishment of the People's Republic of China the taxes and fees handed in from farmers propped up the initial accumulation for the industrialization in China and in recent years along with the speedy development of the industries and service industry the ratio of the agro-tax has witnessed a gradual decrease in the national financial revenue with that taking up 41 percent in 1950 to less than one percent as indicated last year.

The reduction and exemption of the agro-tax have effectively motivated the initiatives of myriads of farmers in the cultivation of grains. Guo Tianchao, a farmer of Daqiao Township of Neixiang County, Henan province who used to do odd jobs away from home told the reporter, the agro-tax burden was too heavy for them in the past and didn't pay at all to grow grain and so the arable land was left in waste. To our surprise the government exempted all our agro-tax and so now we have money to make by tilling the land, and there is no need for us to do anymore job away from home.

The stepping up by China in the reduction and exemption of the agro-tax, Tang Min, Chief economist, Representative of the Asian Development said, will be helpful for reducing the farmers' burdens and for a continuous and stabilized increase of farmers' income and also good for pulling along the domestic consumption and promoting the society and economy to develop in a coordinated and sustainable way.

Statistics indicate, due to the reduction and exemption of the agro-tax and the grain price rise and the first time release of grain-subsidies the average net income for Chinese farmers last year saw an actual increase of six percent, a year in which it saw the farmers' income to rise the most and the biggest in scale.

According to the introduction of Xu Shanda, deputy director general with the State Tax Administration, along with the gradual reduction of the farmers' burdens the distribution order in rural areas will get obviously improved, vicious events and cases in connection with the farmers' burdens will be reduced in great number while the relations between farmers and cadres will also see an obvious improvement.

By People's Daily Online