Tax cut bandwagon is rolled out again but makes no headway

Confucius has many disciples indeed. He would be happy if he were brought back to life at the annual National People's Congress (NPC) in Beijing. No longer content to serve as a mere rubber-stamp body, many lawmakers at the current session have complained, as reported by the mainland press, about the heavy tax burden on the people.

The 2010 NPC is remembered as the first time that mainland lawmakers campaigned for tax cuts.

Confucius protested against heavy taxes when he lived in the 6th and late 5th centuries BC, and one of his most widely remembered aphorisms is that a government that taxes its people too heavily is 'to be feared more than a tiger'.

China's tax revenue was equivalent to 15.7 per cent of gross domestic product in 2002. It has kept rising, despite the government's occasional attempts at 'structural' tax cuts, to almost 23 per cent of GDP in 2011.

But Jia Kang, director of the Ministry of Finance research institute, said real tax revenue was even greater, and in 2011 it was equivalent to 32 per cent of GDP.

According to Cenn.cn, a website owned by the China Enterprise Confederation and China Enterprise Directors Association, taxes account for only a third of the payments charged by various government agencies to small enterprises and the self-employed. The remaining payments are administrative charges and fees.

Thus, people's deputies at this year's meeting in Beijing are prone to mention the nation's 'tax pain'. This is felt most acutely by the salaried class rather than the more wealthy, Jia said at the concurrent session of the Chinese People's Political Consultative Conference (CPPCC), a high-level government advisory body.