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initially be excluded from the new tax system, but would in future be subject to a uniform turnover tax (which would also
apply to domestic enterprises); this would replace the current
consolidated industrial and commercial tax on foreign-funded
enterprises. Three major tax items would apply under the turnover tax category: value-added tax, consumption tax and
business tax. The former would apply to production, wholesale
and retail sales and imported commodities. A small number of commodities, such as tobacco products, alcohol, gasoline, diesel oil, cars and luxury cosmetics would be subject to a consumption
tax on top of VAT. Service sectors including transportation,
insurance, post and telecommunications, construction and entertainment, but excluding commodity wholesale and retail
sales, would be liable to business tax. A value-added tax on
land and new taxes on securities trading, legacies, gifts and
urban construction maintenance would also be introduced.
Personal income tax rates would range from 5% to 45%, but there
would be concessions for foreigners and people from Hong Kong,
Macau and Taiwan.
A7.
C
Despite the renewed emphasis on rapid development, the rapid rise in imports far faster than exports and the
continuing high rate of inflation, despite a slight reduction,
are likely to remain causes of concern to many senior officials. The year on year inflation rate in 35 large and medium sized cities in September was 20.7%, compared with 23.3% in July. The
growth in investment by state units for the third quarter stood at 61.7% compared with 70.7% for the first six months of this
year. Urban residents' earnings for the year until October rose by an average of 29%, or 12% taking account of inflation, according to the State Statistics Bureau (CD 20 Oct).
G.F. 324
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