GOVERNMENT PROMULGATES TAX REGULATIONS ON LAND, BUSINESSES, AND INCOMES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600370840-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: September 26, 2011
• Sequence Number: 840
• Publication Date: February 10, 1951
• Content Type: REPORT

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CLASSIFICATION CONFIDENTIAL
CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
uummj N H41
COUNTRY China
SUBJECT Economic - Finance
HOW
PUBLISHED Daily newspapers
WHERE
PUBLISHED Shanghai; Canton
DATE
PUBLISHED 1 Now, 22 Dec 1950
Chinese
TAI/ DOCUMINT CONTAINS INFORMATION AFFECTING TNC NATIONAL DEFENSE
OF THE UNITED STATES WITHIN THI MEANING OF ESPIONAGE ACT SD
U. S. C.. 11 AND 1S.AS AMENOID. ITS TRANSMISSION OR THE RIT0LATION
ITIO. I! MO
TLAW. IN REPRODUCTION 01 THIS FORM H/SI FNOH NPERSON
NIDITID C IT ?
REPORT
CD NO.
DATE OF
DATE DIST. /0 Feb 1951
NO. OF PAGES 6
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
GOVERNMENT PROMULGATES TAX REGULATIONS
ON LAND, BUSINESSES, AND INCOMES
Regulations for the collection of Shanghai land tax for the
second-half of 1950 are practically the. same as those for the
first half with certain revisions that tighten up on. exemptions.
There is some reduction in the general rate, largely neutralized
by raises in special rates or elimination of exemptions. The
rate of fines for delinquency is considerably reduced.
Publicly operated, or joint publicly and privately owned enter-
prises pay. business and income taxes as well as private enterprises.
Enterprises are divided for tax purpose into regular, temporary,
and street-stall enterprises. The methods of tax collection for
the latter two classes are not included in this set of regulations.
? Heavy fines are provided for evasion, falsification of accounts,
refusals to pay, and delinquents. Review boards are provided for.
Informers will be rewarded on a percentage basis.
SHANGHAI GOVERNMENT ISSUES LAND TAX REGULATIONS -- Shanghai, Ta Kung.Pao,
1 Nov 50
Regulations governing the collection of land tax for the second 6 months
of 1950 have been promulgated by the Shanghai Municipal government. Collection
is to begin 6 November.
The following regulations, which were issued for the collection of taxes
for the first half of 1950, are applicable, except where amended by the attached
revisions:
1. Except for cases exempt by the law, the land tax for the first 6 months
of 1950 should be collected in accordance with these regulations.
2. Land tax shall be collected from the owner or the holder of a mortgage
on the land. In case of an absentee landowner or his legal representative, the
regular lessee may be asked to pay the tax. In cases where the title is not
clear, the present occupant may be asked to pay the tax.
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3. The tax rate for the first half of 1950 shall be .0075 of the standard
valuation. The standard valuation shall be considered to be 10 /ji 7 times the
revised standard valuation used for the collection of land tax for the second
half of 1949.
4. Also, 15 percent of the amount of the assessment shall be added for
local government use.
5. Collections shall begin from 5 April L1959. For the convenience of
the taxpayers, the collection will be by areas and with progressive dates for
the various areas. Collections coming after the end of April shall be adjusted
in accord with the May commodity price index.
6. The following types of real estate may have their land tax reduced or
be exempted:
a. Public land or land used for public purposes or by-the public may
be tax exempt, with the exception of government railway land used by publicly
operated enterprises or other public land producing income which shall not be
tax exempt.
b. In accords with the law, land for which grain levies are paid in
installments shall be exempt from the land tax / iJ .
c. Land used directly for social welfare purposes is tax exempt.
d. Land used directly by private schools, hospitals 5resumably cam-
pus or ground, or other related enterprises, may receive tax reductions of
from 20-50 percent.
e. Tax reductions may be granted families of veterans and heroes
that may be in needy circumstances.
f. Others may receive consideration after government investigation
and approval.
7. Land with no apparent owners may be managed by the authorities in ac-
cord with the provisional law of the municipality for such cases and the taxes
due from the land shall be deducted from the earned income.
8. Those whose duty it is to pay taxes, or their agents, should pay the
tax within 15 days after the date advertised for the beginning of collection.
In case the assessment notice is not received, the responsible parties should
go to the tax office within the prescribed period secure the notice, and pay
the tax; otherwise, they shall be regarded as delinquent.
9. Delinquents not considered liable for criminal action shall receive
an adjustment of their tax according to the current commodity price index, but
delinquency fines shall be reckoned on the amount of the tax according to the
original index. Delinquency fines shall be levied as follows: 10 days or. less
3 percent of the original tax per diem; 10 to.20 days, 4 percent of the orig=
inal tax per diem; 20 to 30 days, 5 percent of the original tax per diem.
In the cases of those more than 30 days delinquent, except for cases
turned over to the court for collection, the fine. maybe adjusted by consulta-
tion in accord with conditions, or the government may carry on as provided
for in Article 7 hbove.
10.. These regulations shall be in force from date of promulgation.
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1. Collections for this period shall be on the basis of 70 percent of
the rate for the first half of the year 1950, except in certain cases not re-
quiring adjustment.
2. Tax collection for local government funds shall be an additional 30
percent added to the general tax. (Revision of Article 4)
3. Article 5 of the regulation for the collection for the first half of
1950 is hereby rescinded.
4. Railway land shall be taxed the same as other land. (Revision of the
Article 6a.)
5. Private schools, hospitals, and independent philanthropic enterprises
may apply for tax exemption for lands devoted to their immediate uses. To do
so, the controlling organization should present clear documentary evidence of
the nature and operations of the organization to the tax bureau for considera-
tion and action approving or denying the application. (Revision of Article 6c
and d.)
6. The taxpayer, or his representative, should appear at the designated
place and pay the tax as indicated in the assessment sheet sent him by the tax
bureau within 10 days of the beginning of the collection period Ls Nov 19597.
If a taxpayer has not received the assessment blank within 5 days of the 1iegin-
ning of the collection.period, he should apply in person at the tax bureau and
secure it to make payment within the stipulated period. Delinquencies in pay-
ment will be dealt with in accordance with previous regulations. (Revision of
Article 8.)
7. Delinquents of under one month shall pay a fine in addition to the
tax of .005 of the tax per diem. Those delinquent more than a month may be
turned over to the courts at the discretion of the tax bureau after careful
study of the circumstances.
PROVISIONAL REGULATIONS ON INDUSTRIAL AND COMMERCIAL TAX -- Canton, Nan-fang
Jih-pao, 22 Dec 50
These regulations were first promulgated by the government Administration
Council, 31 January 1950. They were amended and passed at the 63d adminstra-
tive conference of the Government Administration Council on 15 December'1950
and promulgated on 19 December 1950..
In accordance with the regulations stated herein, all profit-making in-
dustrial and commercial enterprises in China, regardless of whether they are
publicly owned, privately owned, joint publicly and privately owned, or co-
operative enterprises, shall be required to pay-an industrial and commercial
tax in the localities of their businesses.
2. The industrial and commercial enterprises shall transact their busi-
ness under the following three categories: fixed industrial and coammercis,l:.
enterprises, temporary commercial enterprises, and street-stall enterprises
3. The fixed industrial and commercial enterprises shall pay the follow-
ing two types of industrial and commercial tax; the business tax and the
income tax.
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4. The methods of collecting taxes from the temporary commercial enter
prises and street-stall enterprises shall be decided by the Ministry of Finance
of the Central People's government.
5. Publicly owned enterprises shall be required to pay the business tax
according to amdant of business. As for collection of income tax, separate
arrangement shall be made. Income tax will not be collected from "tii-ch'u".
( VL literally to fetch; to select) profits.
6. Joint publicly and privately owned industrial and commercial enter-
prises shall all be required to pay industrial and commercial taxes.
7. The payment of industrial and commercial- taxes by cooperative enter-
prises shall be made in conformity with the law governing the cooperatives.
Some cooperative enterprises may be exempt from paying tax. Others may receive
reductions in tax payment. Special arrangements shall be made to carry out
the collection of tax from cooperative enterprises.
8. The following enterprises shall be exempt from paying the industrial
and commerical taxes:
a. The state-owned special selling and manufacturing enterprises.
b. Poverty stricken craftsmen and home by-products industries.
c. Other enterprises approved for exemption by the Ministry of Finance
of the Central People's government.
9. The tax rates for the industrial and commercial tax shall. be. calculated
as follows:
a. The business tax shall be calculated in the following ways:
(1)
(2)
(3)
One to 3 percent of the total earnings.
1.5 percent to 6 percent of the total profit.
Six to 15 percent from total commissions earned.
A table of different rates for the business tax is provided sep-
arately.
b. Progressive income tax rates range from 5 to 30 percent of total
income.
A table of different rates for income tax.
10. According to the needs of the national reconstruction program and the
nature of the business, a business may receive a reduction of from 5 to-40 per-
cent in its income tax payment as Capital encouragement.
11. In case of industrial and commercial enterprises under one management
which cannot be measured by the same yardstick for taxation, taxes shall be com-
puted as follows:
a. Where one firm carries on concurrently more than two enterprises,
figure the tax for each according to the nature of each. In case it is diffi-
cult to distinguish, compute for each on the basis of the one yielding the high-
est tax.
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b. In cases where it is difficult to distinguish whether an enterprise
is industrial or commercial, compute the tax according to the commercial scale.
c. In case an industry turns out products simultaneously of differing
tax status, employ the scale for the items yielding the lowest tax in computing
tax for all the items.
III. REPORTS AND INVESTIGATION
12. Any enterprise opening, changing to another enterprise, or closing
down should register with the local bureau of industry and commerce having
jurisdiction and receive or turn in its business permit and submit a copy to
the tax office for the record.
13. Industries and businesses should fill in the business tax and income
tax return forms respectively, with supporting documents and send them to the
tax office for auditing.
14. Industries and businesses should set up and maintain a daily journal
and a ledger and indicate when business activites began.
15. To be conversant with business conditions and the responsibilities
borne by business, the tax agencies shall make periodic as well as unscheduled
checks of business houses and industries. The enterprises should cooperate
in keeping accurate accounts, and in opening their records to the authorities.
None should refuse to permit inspection.
16. All representatives of the tax bureau will carry proper identifica-
tion. Business houses may refuse to show their books to those not carrying
such credentials and should report such persons to the tax office.
IV. RECKONING AND PAYING TAXES
17. Commercial firms should reckon their taxes as follows:
A. The total gross income is found by deducting business discounts
allowed and value of goods returned from total sales figures.
b. The gross income should include gratuities, fees, remittance
fees, interest, insurance premiums, and other similar profit items. Costs and
expenses may not be deducted except in the cases of insurance companies who
naj deduct payments made to policy holders on losses.
c. Profits from commissions should be reckoned as gross income with
no deductions for costs or other expenses.
18. Income shall be considered to be the total receipts for the calendar
year, or portion thereof, during which business operations were actually,car-
ried on, less costs, expenses, and losses.
19. Industries and businesses should compute their taxes before issuing
bonuses.
20. Tax agencies shall use the following methods of collection according
to conditions:
a. Where accounting systems are recognized by tax agencies as ade-
quate so that there is assurance of a correct reckoning of the tax, the
method of voluntary reporting followed by an audit, may be used.
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b. Where the above conditions do not prevail, method of individual
report followed by public review and democratic decision shall be used, with
the amount of tax decided upon after collation of the materials secured in
the investigation.
the amount tobebdeteerminedson shall be collected on the basis of a
c. Taxes o
period,
21. Business taxes may be paid on the monthly or quarterly basis. When
paid on a quarterly basis, the payments should be made in April, August, No-
vember, and January, respectively.
The'income tax is payable on an estimated basis after the close of
the second quarter's business and on the basis of the annual accounting not
later than March of the new year.
22. In case a business or industry is reorganized, consolidated, dis-
persed, sold, goes bankrupt, closes down, or goes into the hands of a liqui-
dator, the business and income taxes for the period of operation should be
reported and paid within the stipulated period for such action.
23. To handle cases occuring under Article 20b above, a democratic
board of review shall be organized. The details of the organization and oper-
ation of this board shall be provided for separately.
24. Violators of Articles 12, 13, 14, 15, or 22 above, may be fined
not more than 1 million yuan.
25. False reporting of business conditions and income tax amounts will
result in the imposition of a fine, in addition to payment of the original
tax, of from two to ten times the original amount of the tax. Fabricators
of false records, or those who refuse to pay their tax shall be turned over
to the courts in serious cases.
26. Informers og violations of the above two articles may receive from
20 to 30 perc.;:nt of the fines imposed as reward.
27, Delinquents shall be fined 1 percent [f their tax? per diem for each
day of delinquency. Increase or decrease of this percentage is possible only
on order of the Ministry of Finance of the Central government.
28. The details covering the implementation of these regulations shall
be issued separately by the Ministry of Finance of the Central government.
29. These regulations shall be in effect from the date of promulgation.
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