Around the New Year, provincial-level regions have announced that they will abolish agricultural taxes one after another. On January 24, Luo Qingquan, governor of Hubei province, announced that starting from 2005 Hubei would abolish all agricultural taxes in the province. As 25 provincial-level regions have already abolished agricultural taxes, the target to cancel agricultural taxes nationwide by 2009 -- a pledge by Premier Wen Jiabao last March -- may be realized ahead of time.

The reform of rural taxes and administrative charges was accelerated remarkably last year after more than four years of experimental reform. The reform was started from regular taxes and administrative charges in the way of "reducing farmers' burdens, standardizing taxes and maintaining stable in rural areas". First Premier Wen Jiabao promised on behalf of the Chinese government that agricultural taxes would be abolished within five years. Following this the central committee of the Communist Party of China made a decision that the experimental reform of abolishing rural taxes would be started in the two provinces of Heilongjiang and Gilin, the agricultural tax rate in another 11 grain-growing provinces and regions will be reduced by three percentage points and in remaining provinces in the country by 1 percentage point. With in-depth reform of rural taxes more provinces and regions have decided to rescind agricultural taxes on their own initiative. It is estimated that by the end of last year the agricultural tax burden on farmers was reduced by some 28 billion yuan or 3.39 billion US dollars with the burden on farmers reduced by 30 per cent generally. This year the overall agricultural tax burden on farmers will be reduced by two thirds.

The acceleration of agricultural tax reduction and exemption will bring benefits to millions of farmers. And the potential significance is far from this.

It is an important sign to reduce and abolish agricultural taxes. It signals that an old tax for levying taxes on farmers has been accelerated to withdraw from historical stage; that industry aids agriculture with a great substantive stride made in balancing urban and rural development. "National taxes" have been levied in China for several thousand years and were once the main income for national finance. At the beginning of the founding of new China farmers tightened their belts to pay agricultural taxes, providing the national industrialization with precious accumulation. Time passes and the situation has changed. At present, the gross domestic product (GDP) in China has reached to 13,000 billion yuan or 1,571.9 billion US dollars, accounting for 85 per cent of non-agricultural GDP while the ratio of agricultural taxes was reduced to less than 1 per cent last year from 41 per cent in 1950. There exists a situation in which industry can assist agriculture and urban areas can bring development to rural areas. It is reasonable to let farmer reduce their burden.

The acceleration of agricultural tax reduction and exemption will bring about many important changes in rural economic society. In the past it was an important duty for officials at grassroots level to levy taxes. Nowadays where will surplus officials go and what will the leftover officials do due to no need for levying agricultural taxes? In the past many public welfare undertakings in rural areas need farmers' payment. Who will pay the administrative charges after agricultural taxes exemption? Which matters will villagers solve? Take rural education for example. Who will be in charge of paying for schoolhouse repairs? Who will pay for teachers' salaries? Can the children in the rural poor families go to school? Will it be that villagers will do what the rural affairs require if the mechanism remains without agricultural taxes? There will be two consequences: there will be no normal operation for rural organizations at grassroots level with heavy financial burden, and the social undertakings including rural education and public health will come to a halt; or changing ways to ask payment from farmers and there will be new ways for placing burdens on farmers. So it is looming ahead to implement all relevant reforms. There will be the adjustment for national income distribution behind the agricultural taxes exemption. So it is not allowed to underestimate the complexity of the change.

It will be "less" benefits for farmers even if the target to cancel agricultural taxes nationwide is realized. More channels should be encouraged to increase farmers' income. It is not only to abolish agricultural taxes that the millions of farmers are looking forward to, what they want to is how to make more money, to have better schools, to have more convenient hospitals and to live a more heart-soothing life. The acceleration of agricultural tax reduction and exemption will bring new look to the development of rural economy and society.

By People's Daily Online