Property Tax Trials Set for More Cities


China will extend a property tax trial to more cities at an "appropriate time" this year and deepen resource tax reform, its top planning body said yesterday as the nation moves toward a more market-based economy.

The property tax, currently in operation in Shanghai and Chongqing, is aimed at curbing soaring housing prices.

When it rolled out the levy early last year, the Ministry of Finance said all provinces would adopt the tax "when conditions are ripe."

The National Development and Reform Commission announcement underscores China's push for further reform of taxes, prices, currency, the financial industry and income distribution, among others.

Vice Premier Li Keqiang said at the weekend that China could not delay tough economic reforms as the nation had reached a crucial point in changing its growth mode, with the aim of keeping economic growth relatively fast and prices basically stable.

The commission also said that China would advance reform in resource tax in more areas and on more products.

This will include a change in the tax mode from a volume-based levy to a tax based on sales price, which will increase the burden on mining companies as commodity prices have soared over the past few years.

The commission also said it will study levying a consumption tax on certain products which consume large amounts of resources and pollute the environment during production.

It also reiterated plans to deepen pricing reform on energy and utility products so they better reflect the scarcity of resources and curb excess demand.

The commission's wide-ranging statement was posted on the central government's website after being approved by the State Council, China's Cabinet.

It said China would continue to work out preferential policies to support the private sector to invest in industries ranging from railways, energy and telecoms to education and medical care.

Private companies will be encouraged to take part in the restructuring of state-owned enterprises.

The government will also improve fiscal policies to help small and micro-sized companies .

The nation will also amend its rules on loans to regulate private lending practices which were highlighted by the death sentence on a Zhejiang businesswoman for illegal fundraising early this year.

China will also release a reform plan on the use of government cars, the document said.

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