Illegal fees on businesses to be remedied

State Council urges better oversight of intermediary services market

The State Council has stepped up efforts to remedy illegal fees levied on businesses, with experts calling for the establishment of long-term mechanisms targeting such charges.

Local authorities must take the responsibility to remedy illegal fees levied on businesses, and government departments are forbidden from transferring their own expenses to businesses, the Cabinet said in a statement released after an executive meeting on Wednesday.

The measures are designed to ensure the full implementation of large-scale tax and fee cuts, to develop a business environment in line with the rule of law and to better energize market entities, the statement said.

Industry associations and government-affiliated institutions are strictly prohibited from using their administrative powers to levy charges, the statement said. Fees that have been collected illegally must be returned within a given time period, and those responsible must be held accountable, it added.

Premier Li Keqiang said in this year's Government Work Report that the country would overhaul surcharges on electricity prices, lower electricity costs in manufacturing, and cut the average electricity price for general industrial and commercial businesses by 10 percent.

A number of railway and port charges would be abolished or lowered, and the government would launch an initiative to address the collection of charges by intermediary organizations, he said.

"We will make the collection of charges open and transparent and leave unauthorized charges no place to hide," he said.

Chen Sheng, a professor with the School of Public Affairs at Chongqing University, said illegal charges on businesses not only increase corporate costs but also damage the credibility of government.

"It has long been a problem troubling businesses," he said. "Thus it would require a fundamental solution."

The government must make it mandatory that all charges levied on business be made public, Chen said.

"All fees must be compiled into a list, and those outside the list can be deemed illegal," he said. "It is important to make sure that all fees are collected in line with laws and regulations, and to step up law enforcement against illegal charges."

At its executive meeting, the State Council also vowed to crack down on fees illegally levied by bank branches and to establish a mechanism that accepts reports on violations, conducts random checks and punishes wrongdoers.

It also urged local authorities and departments to accelerate the compilation of a list of third-party services that businesses must resort to for things like certification, and to make the pricing standards public.

The measures will be integrated with the reform to streamline administration, enhance compliance oversight and improve government services, with steps to promote the decoupling of intermediary agencies and government departments, the statement said.

It also called for better oversight of the intermediary services market, with measures to address problems of monopolized and forced services and unreasonable charges.

Local authorities must ensure funding support after the charges are scrapped so that related administrative services will not be affected, the State Council said.

Liu Junguo, a researcher with China Enterprise Confederation, said the key to overhauling illegal fees to businesses lies in the establishment of a long-term mechanism that enables public supervision and allows businesses to file complaints.

"On the one hand, the government must conduct a complete overhaul of illegal charges. On the other hand, the government must establish an unimpeded system for the public to make complaints and step up punishments for violations," he told Xinhua News Agency.

In the first half of the year, the government's nontax income increased by 21.4 percent year-on-year to 1.54 trillion yuan ($223.7 billion), according to the Ministry of Finance.

Liu Jinyun, an official with the ministry, told a news briefing on July 16 that most of the increase was due to the authorities working to replenish government revenues with State-owned funds and capital, rather than increasing the fees levied on businesses.

The government's administrative charges were down by 0.5 percent to 208.5 billion yuan in the first half of this year, he said, after falling by 20.6 percent year-on-year in the first half of last year.