Abstract
China’s existing tax system was established via the famous comprehensive fiscal reform conducted in 1994. In the next 20 years a series of incremental measures have been taken to improve this tax system framework. However, along with the increasingly deepened economic reform process, both outside and inside environments and the constrain condition facing the tax system have changed greatly. People have new adequate expectations for the tax policy. Responding to this changing circumstance, the direction of the tax system reform has undergone a fundamental change with its goal switching from «establishing the basic framework of the tax system suitable to the socialist market economy» to «establishing the modern tax regime in line with the modernization of the national administration system and administration capability» since the Third Plenary Session of the 18th Central Committee of the Communist Party of China (CCCPC) on November 12, 2013. Against this background, we comprehensively analyze the causes, main contents, focuses, supporting measures and enforcement roadmaps of this fundamental tax reform.
Highlights
China’s existing tax system was established via the 1994 Tax Reform
Since that year an overall economic reform strategy toward the socialist market economy was initiated from top to bottom
As an indispensable part of this strategy a new round of tax system reform was carried out since 1993 which was entitled as The 1994 Tax Reform for most relating reform measures went in effect at the beginning of 1994
Summary
China’s existing tax system was established via the 1994 Tax Reform. Prior to that, the former Soviet Union style tax regime was practiced in China. As seen from the subsequent analysis, the new phase of the tax reform is significantly different from the prior two ones in terms of its direction, the focal point and the coming major reform measures. Against such a background, this paper is devoted to discussion of the driving forces, main contents, focuses, supporting measures and the enforcement roadmaps for China’s tax system reform at the new stage.
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