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T A B L E 4 . 8 Bases, Rates, Sharing Arrangements, and Percentages of Total Local Government Revenues for Shared Taxes
Tax
Base
Share of local revenue, Rate (%) Sharing arrangement 2003 (%)
Business tax
Services provided 3–20
Value added tax
Added value of 0–17 production and productive service Taxable income 33
Enterprise income tax
Individual income tax Foreign enterprise income tax Stamp tax on security transaction
Taxable income Taxable income
5–45 15–33
Transaction value 0.003 on document
All business tax 28 except for that on rail transportation and on headquarters for banks and insurance companies 25% domestic VAT 18
40%, except for tax on centrally owned enterprises; local banks, foreign banks, and other financial corporations; rail transportation; and headquarters for banks and insurance companies 40% Same as enterprise income tax 3%
9
6 3 1
Source: Unpublished data from Ministry of Finance and State Administration of Taxation of China.
ment for subprovincial governments. However, the key point it stressed was the discretionary role of provincial governments. This arrangement implies that revenue assignments may vary by province. The current practice can be summarized as follows: Revenue from the major or key industries belongs to the provincial government; for example, business tax payable by the financial industry belongs to the provincial government (Zhang 2005).
