According to the Beijing Daily Yang Chongchun, president of the Chinese Taxation Institute and member of the Chinese People's Political Consultative Conference (CPPCC), said the launch of inheritance tax is still under study in China and is unlikely in years to come. To launch the tax problems such as inadequate tax source and high taxation costs need to be addressed. Yang made the comments in response to some reports that inheritance tax is expected to prompt legislation next year.

The rich are still too young to be source of inheritance tax

Yang Chongchun said in light of China's situation the launch of inheritance tax is necessary. However, it is still under study. The launch of any kind of tax has to have actual meaning. It should have the regulatory function. It is only 20 years or so since the start of the reform and opening up. Before then the general situation was low salary and low income. Some people did not even have housing. Where could they get inheritance to pay tax for? We encourage some people to get rich first. So far there have not been many rich people. Therefore it is still too early for China to launch inheritance tax.

Ji Zhu, professor at the Economics School of Beijing Technology and Business University, also said in order not to hurt the interests of people with low incomes those who are poor the threshold of inheritance tax would not be set at a level like 100,000 yuan, but should be at no less than 1 million yuan. Such a threshold means that the target of inheritance tax is people with high income and those who are rich. However, most of the high-income and rich people in China are relatively young and will not come to face the question of inheritance taxation in the short run. Therefore, if inheritance tax is launched in the near future it will encounter the embarrassment of inadequate tax source.

High taxation costs force some countries to lift it

According to Sun Gang, research fellow at the Financial Science Research Institute of the Ministry of Finance, the taxation of inheritance is a costly and unrewarding business in many countries and regions because of the high taxation costs. Take the inheritance of a villa or as an example. Although its evaluation value is very high it is not in the form of cash and therefore cannot be taxed. Canada has already lifted inheritance tax while China's HK and the US are discussing lifting inheritance tax.

By People's Daily Online