Cutting Down Farmers' Financial Load

The replacement of the payment of fees in rural areas with legalized taxes is being heralded as a major rural reform in discussions being held by the Ninth National People's Congress (NPC), which is in session this week.

The reform, piloted in Anhui Province in 2000, freed farmers from a long list of exorbitant fees and required them to pay only an agricultural tax, some surtaxes and a special agricultural product tax, according to Zhu Yuming, one of the Anhui NPC delegates.

The East China province, famous for its bold initiative more than 20 years ago with a household responsibility system - which was later adopted nationwide- has once again become a pace-setter, working out a system to reduce the excessive burdens on farmers.

In addition to paying legal taxes, Chinese farmers in many regions are subject to numerous fees, fund-collecting projects and fines imposed under various pretexts by local authorities, Xiong Jiazhen, an NPC deputy from Hubei Province, said yesterday.

For example, legal taxes for Huaiyuan County of Anhui Province have been averaging 26.6 million yuan (US$3.2 million) a year. But before the reform replacing fees with taxes launched, the 1.1 million farmers in the county had to pay 80.8 million yuan (US$9.7 million) in fees a year, according to statistics from the county government.

As an NPC deputy, Zhu said he had conducted extensive investigations in rural areas before heading for Beijing to attend the on-going Fourth Session of the Ninth NPC.

Zhu said the reform replacing fees with taxes had helped cut the per capita tax and fee load on farmers by 31 per cent to 75.5 yuan (US$9) on average - from 109.4 yuan (US$13) before the reform was launched. The cuts included cancellation of 50 fee and fund-raising items.

The new arrangements have brought immense satisfaction to farmers and are instrumental in improving the once strained relations between the farmers and the local governments, he said.

Premier Zhu Rongji, in his report on the outline for the 10th Five-Year Plan (2001-05) at the opening of the NPC session on Monday, endorsed that the fee elimination scheme as "a sound policy for safeguarding the legitimate rights and interests of farmers and reducing their burden."

But deputy Zhu Yuming cautioned that the government could by no means say that it had scored a success in this unprecedented reform.

"The tax-for-fees pilot project in Anhui has chalked up some positive results, but there is still a long way to go to keep the farmers satisfied - over the long term - by stabilizing current tax levels and instituting supporting policies to consolidate the achievements," Zhu said.

Some obvious problems have arisen because of the reduced revenues for township governments as a result of the elimination of fees, said Jiang Zuojun, another NPC deputy and also vice-governor of Anhui Province.

He said the daily operation of governments at the township level and even rural compulsory education, which used to depend on fees, have met with financial shortages.

The province also launched rural reforms including streamlining township governments, reducing the number of village and group functionaries receiving government subsidies and dissolving or merging some towns and villages, Jiang said.

(China Daily 03/08/2001)