Research on the Taxation Policies and Systems of China's Financial Industry

Author: Wang Zaiqing
Publisher:
Publish Date: 2005-05-01
Features: China's Tax Burden and Tax Policy Issues Research is a major research project of the Key Research Base of Humanities and Social Sciences of the Ministry of Education for the academic year 2002-2003. The research on this topic is based on the following three considerations:
(1) This is an important part of the research on fiscal policy conducted by the Center for Fiscal and Financial Policy Research of Renmin University of China. To strengthen scientific research in humanities and social sciences in higher education institutions, the Ministry of Education decided to establish key research bases in universities. The Center for Fiscal and Financial Policy Research of Renmin University of China was one of the key research bases in humanities and social sciences approved by the Ministry of Education in September 2000. This research base sets up two major research projects each year, one on fiscal policy and the other on monetary and financial policy, which are open to bidding nationwide. In fiscal policy, research projects such as The Effective Coordination of Fiscal Policy and Monetary Policy and Research on Fiscal Policy during the 10th Five-Year Plan Period were successively studied in the years 2000 and 2001. China's Tax Burden and Tax Policy Issues Research was included as an important part of the fiscal policy in the research projects of 2002. Since 1998, China has implemented an expansionary active fiscal policy characterized by expanding government bond investment. Generally, expansionary fiscal policy should involve measures to increase spending and reduce taxes. During this period, some adjustments were made in China's tax policy, but the was very small. Instead, there was an extraordinary increase in tax revenue, which led to debates about tax increases and reductions. This raises the issue of how to understand the role and position of tax policy in active fiscal policy, as well as the direction of tax system reform. The core issue of tax policy is the level of tax burden and its adjustment, so it is very necessary to conduct an in-depth and systematic study of China's current tax burden and tax policy.
(2) Since 1997, I have been in charge of the research on the Tax Burden Issue and Tax and Macroeconomic Regulation by the Academic Committee of the China Taxation Society for each year, and published works such as Tax Burden Research (1999), Research on Current Chinese Tax Policy (2001), Tax Burden and Deepening Tax System Reform (2002), and Research on Current Tax Macro-Control Issues (2003), as well as some related papers. These researches and writings have laid a foundation for the research topic of China's Tax Burden and Tax Policy Issues.
(3) In recent years, the PhD students I have guided have written doctoral dissertations on tax theory, policy, and systems from different perspectives, involving issues such as macro tax burden, economic structure adjustment, income distribution, environmental protection, financial taxation, trust tax systems, and e-commerce. These studies have considerable depth. Based on the above circumstances, I designed and undertook the research project of China's Tax Burden and Tax Policy Issues.
China's emphasis on and application of tax policy can be traced back to the period of national economic recovery after the founding of the People's Republic of China. On October 1, 1949, the People's Republic of China was newly established, and the first National Taxation Conference was held from November 24 to December 9, proposing the policy spirit of "ensuring the supply of the revolutionary war, taking into account the restoration and development of production and the needs of national construction, simplifying the tax system, and implementing a reasonable burden-sharing." This unified the national tax system and formulated the Measures for the Implementation of National Taxation. In the subsequent period of socialist transformation of the means of production, the tax burden policy implemented was "different treatment for public and private enterprises, varying complexity, with industry lighter than commerce, means of production lighter than consumer goods, and necessities lighter than luxuries." In 1956, after the basic completion of the socialist transformation of the means of production, the views of the "tax shell theory" and "tax useless theory" were quite prevalent, and proposals to abolish taxes and implement a "tax-profit integration" system were made and piloted in some cities and enterprises. Of course, under the highly centralized management system at the time, which did not recognize the independent economic interests of enterprises, the role of taxation in regulating the economy was actually unable to be realized.