Taxation in decentralizing socialist economies : the case of China
The authors analyze the tax system in China, where reforms designed to move the economic system toward a market economy have been occurring for more than a decade. The authors characterize the comprehensive changes in the tax system that could be undertaken in the presence of system-wide reform, especially of prices and enterprises, as well as of more moderate reforms that must suffice in the absence of reforms elsewhere in the economic system. In connection with tax reform per se, they emphasize that it is possible to simplify significantly the rate structure for indirect taxes in the presence of price controls, but a unified rate for value-added tax is undesirable without full decontrol of prices. They also found that the state's role as owner of enterprises must be treated separately from its role as tax collector. All enterprises should pay statutory profits taxes. Negotiation (of the kind that characterizes the contract responsibility system) should be confined to the payments to government from after-tax profits. Those payments could be set to balance incentives to enterprises with the need for the state to earn a return on assets historically provided free to those enterprises. The mode of analysis developed in this paper can be applied to a wider range of economies - whether emerging from a socialist past or not - that are progressing at varying speeds in the interlinked areas of tax reform, price reform, and enterprise reform.
|Date of creation:||31 Jan 1992|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heady, Christopher J. & Mitra, Pradeep K., 1992. "Commodity taxation with administered and free market prices: theory and an application to China," Journal of Public Economics, Elsevier, vol. 47(2), pages 207-225, March.
- Perkins, Dwight Heald, 1988. "Reforming China's Economic System," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 601-645, June.
- Mervyn A. King, 1986. "The Cash Flow Corporate Income Tax," NBER Working Papers 1993, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:820. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.