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Government Implements Rules on Taxation
The government yesterday began implementing detailed rules, issued last month, for the law governing tax collection supervision and administration.

The move spearheads a tougher campaign against tax evasion and a greater awareness of paying taxes.

About a decade ago, however, the term taxation had little relevance to most people, who were forced to pay taxes only on their bicycles. Now taxes are being levied on salaries, interest earned from savings deposits and on buying a home.

Although the law on individual income tax was introduced in 1980, for a long time it meant little to most citizens.

According to Professor Liu Junhai of the Research Institute of the Science of Law under the Chinese Academy of Social Sciences, the law set the minimum taxable individual monthly income at 800 yuan (US$96.38), which was higher than the income of regular workers under the former centrally planned economy.

Paying taxes meant nothing to most citizens.

In the wake of the country's rapid economic growth, the average incomes of the Chinese people have in-creased greatly, providing a solid base for tax collection.

State Administration of Taxation sources say revenue from individual income taxes has chalked up the fastest growth among all kinds of taxes levied since 1994, when China set about reforming its taxation system.

The annual average growth rate was 48 percent over the past eight years, amounting to tax revenues of nearly 100 billion yuan last year, of which 41 percent came from salaries.

According to a survey by Shenzhen University, 95 per-cent of the respondents believe that economic development and people's greater awareness of paying tax have stimulated the substantial increase in tax revenues.

China still loses a large amount of money in tax revenues, particularly from individual incomes, due to existing loopholes in taxation control and the absence of a credit information system.

The new rules on taxation administration and super-vision include measures to prevent tax evasion.

The rules also require a taxation registration system, under which taxpayers who run a business are allowed to open a banking account only if the taxpayer possess the relevant taxation registration documents.

(eastday.com October 16, 2002)

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