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Taxation system must be more accountable


2005-09-21
China Daily

What people are curious about the lengthy and enthusiastic discussions on personal income tax is the silence from financial officials.

It is not up to them to decide how and to what extent the personal income tax system should be changed. The National People's Congress (NPC) has the last say.

The NPC is in a position to explain to taxpayers the reasoning behind and methodology used for the levying of the tax, and how their money is spent. NPC delegates can float policy recommendations.

Taxpayers, who pay for public services, have a right to know. Law makers also need information if they are to make reasonable decisions.

The State Administration of Taxation earlier this week said the taxman will use new methods to close loopholes in the personal income tax collection system.

Heated discussions were sparked by deputies to the NPC, at their annual session in March, raising their voices over personal taxation.

The debate centred on determining to what extent and how the threshold for the levying of the tax - which has been 800 yuan (US$99) for two decades - should be raised.

However, financial and taxation authorities' reaction has been announcing how they will improve the practice of collection, as they did this week, apparently to prepare for inaction over the proposed raising of the threshold.

They should have played a constructive role in the discussion to clarify facts, explain the situation and float policy recommendations. But they did not. They virtually turned a blind eye to the calls for information and were seemingly absent in the debates, which did not generate an outcome other than postponement of the NPC's deliberations.

Taxpayers' questions are legitimate.

They need to know about the very basic principles as well as technicalities of setting the threshold for the tax.

They need to know the taxman's ideas about addressing the concern that the rich are not paying enough because they have the means to avoid doing so.

They also need to know whether their money has been and will be used properly and efficiently.

The debate over personal tax, which affects many more people than other taxes do, will naturally lead to increasing scrutiny of the government's public spending plans.

The surging number of complaints about education and medical care has made the matter more prominent. Many argue these key sectors that should be supported by public finances have not received sufficient government funding.

Taxation can be a philosophical matter. It is also highly technical. It is related not only to mathematics but also to the State-citizen relationship and macroeconomic policy.

The rapidly changing economic and social landscape of the country makes expounding the issue of taxation difficult. But related departments must try. After all, they have to learn to be more accountable.

 
 
     
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