Today, my colleague and I are very pleased to have the opportunity to meet you all and brief you on the tax administration of the People’s Republic of China in 2000 and the mission of tax administration in the upcoming 10th Five-Year Plan period.
The total amount of tax revenue of the People’s Republic of China in 2000 reaches RMB 1266 billion yuan, with an increase of 234.8 billion yuan and 22.8% growth over the previous year. Subsequent to an annual increase of RMB 100 billion in the past six years in succession and a record high of over 1000 billion yuan of revenue in 1999, the annual revenue increase in 2000 amounts to an unprecedented amount of 200 billion. Hearing the good news, senior leaders of the State Council extended their congratulations on the remarkable achievements, which they noted could not have been scored without the devotion of all tax officers at different levels. They also commented that more efforts would be made in the new year to strengthen administration, block loopholes, crackdown fraud, penalize corruption, rectify arrears, and in particular, to quicken the pace of construction of the Golden Tax Project, to overcome difficulties and step onto a new high with more achievements in taxation and more contribution to the good commencement of the 10th Five-Year Plan.
With the successful fulfillment of the targeted 2000 revenue objective, tax policies of expanding export, boost investment and stimulate consumption; incentive regimes in support of hi-tech industry, reform of state owned enterprises and development of the western part of China continued to be implemented. The potential of taxation as a macro-regulator was further realized, with positive contributions made to the favorable upturn in the development of national economy.
2001 is the new centennial year and the first year of the implementation of the state tenth Five-Year Plan. Under the guiding spirits of the 5th Plenary Session of the 15th Conference of the Central Committee of the Chinese Community Party and the work facing tax administrators, the major objective and mission for tax administration during the period of the 10th Five-Year Plan are as follows. (1) The coordinated growth of revenue and national economy should be ensured. The synchronic revenue/GDP growth or revenue going up a bit faster than that of GDP should be maintained. Every effort will be made to ensure that the amount of tax revenue will enter a new high by 2005. The ratio of tax revenue to GDP will be raised further and the portion of the amount of central revenue in the total will also be raised further. (2) The improvement of tax system will be continued. In line with the requirements of the socialist market economy and the entry into the World Trade Organization, the improvement of tax system in the next few years will include the following issues. First, the swap of VAT from production type to consumption type will be made at appropriate time. Secondly, income tax for domestic enterprises and enterprises with foreign investment will be gradually consolidated and personal income tax will be improved. Thirdly, part of policies on excise and business tax will be adjusted. Fourthly, the pace of local tax reform will be quickened. It includes the merge and amending of vehicle and vessel usage tax, vehicle and vessel usage liscence plate tax, real estate tax, urban real estate tax and urban and township land use tax; the extending of city maintenance and construction tax to enterprises with foreign investment and foreign enterprises at an appropriate time. The levy of land appreciation tax will be discontinued at appropriate time and the slaughter tax will be eliminated with the progression of fee-to-tax swap in the countryside at an appropriate time. Fifthly, fee-to-tax swap will be carried out step by step. The Tax on Vehicle Purchase was introduced on 1 January 2001. Tax on Fuel will come into force at a time determined by the State Council in accordance with macro-economic trends. (3) Reform of tax administration will be deepened. Based on the improved administration model, modern tax administration system characterized by information technology and professional competence will be preliminarily set up. (4) The pace of the construction assisted by information technology will be quickened. Tax information management system which is multi-functional, highly coordinated and efficient, resource sharing, stringently monitored, secure and reliable will be preliminarily established. The core of computerization is to quicken the pace of construction of the Golden Tax Project that can be utilized to monitor tax source and curb tax evasion as soon as possible. (5) The effective buildup of tax administrators’ team will be strengthened. With the intensifying of organizational restructuring and the reform of personnel system, mechanisms will be set up to monitor and check tax law enforcement and administrative powers. More efforts will be made to train tax officers to improve the overall qualification of tax administrators’ team.
Now my colleague and I would be pleased to answer your questions.