Tax Dilemma for China’s Ministry of Finance

From Economic Observer Online:

Corporate income tax is likely to be targeted as a major source to boost China’s state coffer as its Ministry of Finance faces increasing fiscal spending pressure from natural disasters and global price surges of resources.

The EO has learned that taxation departments had been ordered to enhance corporate income tax management and curb tax evasion.

The directive came at a time when the cries for tax cuts had grown as small and medium enterprises were hard pressed by tight macro-control policy since late last year, and they were calling for preferential policies to pull through the difficult time.

Despite the outcry, an official from Ministry of Finance said it was not the right time to introduce preferential tax policies, as the Ministry was contemplating how to increase tax revenue to meet rising fiscal spending for the coming years.

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