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Tax Policy and Tax Reform in the People's Republic of China

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  • Bert Brys
  • Stephen Matthews
  • Richard Herd
  • Xiao Wang
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    Abstract

    This paper compares the tax system in China with the tax system in OECD countries and the tax reforms China and OECD countries have implemented in the past. The analysis focuses on those taxes and tax issues which are currently on China’s reform agenda, including the consumption taxes (especially the integration of the “business tax” into the VAT), environmentally-related taxes, the personal income tax, fiscal relations between the central and sub-central levels of government and property taxes. The paper provides a (preliminary) analysis of the tax-to-GDP ratio and the tax mix in China as well as the average and marginal tax wedge on labour income, by applying the OECD’s Revenue Statistics and Taxing Wages methodology. Although a country’s culture, traditions and legal system play an important part in shaping its tax regime and how it can be reformed, the paper also reviews the general design issues on how to make the tax system in China more growth-friendly, simple and transparent, less distortive and fairer. The paper contains a detailed discussion and evaluation of each tax and considers possible directions for future tax reform in China. Politique et réformes fiscales en République Populaire de Chine Ce document compare le système fiscal en Chine avec celui des pays de l’OCDE en tenant compte des réformes que ces pays ont mis en oeuvre par le passé. L’analyse se concentre sur les impôts et les questions fiscales pour lesquels la Chine envisage une réforme, y compris les impôts sur la consommation (notamment l’intégration de « la taxe d’affaires » dans la TVA), les taxes liées à l’environnement, l’impôt sur le revenu des personnes physiques, les relations budgétaires entre l’administration centrale et les administrations infranationales, ainsi que les impôts fonciers. Ce document présente une analyse (préliminaire) du ratio impôts/PIB et de la structure fiscale en Chine, ainsi que du coin fiscal moyen et marginal sur les revenus du travail, en appliquant la méthodologie utilisée dans les publications de l’OCDE Statistiques des recettes publiques et Les impôts sur les salaires. Bien que la culture, les traditions et le système juridique d’un pays jouent un rôle important pour façonner son régime fiscal et influent sur les possibilités de réforme, ce document aborde également des questions générales de conception en vue de déterminer comment faire en sorte que le système fiscal en Chine soit plus favorable à la croissance, simple, transparent et équitable, et induise moins de distorsions. Ce document examine et évalue chaque impôt en détail et réfléchit aux orientations possibles de la future réforme fiscale en Chine.

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    File URL: http://dx.doi.org/10.1787/5k40l4dlmnzw-en
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Taxation Working Papers with number 18.

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    Date of creation: 04 Sep 2013
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    Handle: RePEc:oec:ctpaaa:18-en

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    Keywords: tax reform; China; tax policy; Chine; réforme fiscale; politique fiscale;

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