Economy

China plans gradual residential property tax: MOF

By Hu Yang (chinadaily.com.cn)
Updated: 2010-12-03 17:59

China will gradually introduce a residential property tax during the next Five-Year Plan (2011-2015), a tax official from the Ministry of Finance (MOF) said Thursday.

Zhou Chuanhua, director of the Tax Policy Department of the MOF, said at a meeting that a property tax reform will be carried out in the next five years and residential property tax will be introduced, without elaborating on the tax threshold. He also said property taxes could become an important and stable source of local government's revenue.

Currently, China levies property taxes only on commercial housing.

Zhou also said resources tax will be launched nationwide in the next five-year plan as the pilot program in Xinjiang autonomous region proved a success. The subjects of the resource tax will be expanded from natural gas and crude oil to coal and water. The move can also help increase local government revenue.

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As part of a value-added tax reform, industries that are levied with business taxes will be included in the value-added tax category to avoid duplicating taxes, Zhou said.

The focus of China's tax reform during the next Five-Year Plan (2011-2015)?is to expand local governments' revenue sources and reduce fiscal reliance on areas such as the real-estate market.