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Debate on corporate tax law fast-tracked
By Sun Shangwu (China Daily)
Updated: 2006-03-02 05:37

The National People's Congress (NPC) has made a significant adjustment to its lawmaking timetable: debate on the corporate tax law will be speeded up while legislators will take more time to study the draft law on property rights.

The announcement on the two key pieces of legislation was made by a senior official of the NPC Standing Committee yesterday in Beijing, four days before the opening of the national legislature's annual session.

The focus of the amendment to the Corporate Income Tax Law is to bring parity to taxes paid by domestic and foreign companies while the property law is to define the protection of citizens' private properties.

The official, from the Legislative Affairs Commission of the NPC Standing Committee, said the corporate income tax law will unify income tax rates for all companies in China so as to "promote equal competition."

Domestic companies have long complained that they are not on a level playing field because of lower tax rates for foreign-funded enterprises.

Foreign companies enjoy a preferential tax rate of 15 per cent compared to 33 per cent for domestic firms.

The draft law on property rights which has been reviewed four times by the NPC Standing Committee was scheduled to have been submitted for voting this year.

But it has been taken off the agenda due to "different opinions and differences on the understanding of certain issues," the official said.

Legislators usually review a draft law twice or three times before passing it.

Lawmakers want to make further studies on the draft law of property rights, the official said, adding that his commission will conduct more research so that it "reflects China's fundamental socialist economic system."

In August last year, a law professor at the prestigious Peking University wrote an open letter saying that the proposed legislation seemed to be in conflict with the principle that public ownership should dominate China's economic system. His letter is widely believed to be a catalyst for the change in the law-making plan.

The official also said that the new law should "uphold the basic interests of farmers" and "reflect the principle of giving equal protection to State, collective and private properties."

Besides, further studies are needed on the conflict of property rights and creditors' rights and related technical details, he noted.

He also said that more efforts would be made this year to make the legislation process more democratic.

For example, the law on labour contracts will be made public to solicit opinion from the public because it is believed to "involve the personal interests of millions of people."

(China Daily 03/02/2006 page1)



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