China's Ministry of Finance is reportedly close to publishing the draft for the country's tariff law. The draft for the proposed law is expected to be released for public opinion in the coming months, sources close to the matter have revealed.
Reports citing the aforementioned sources close to the ministry revealed on Wednesday that China is now actively accelerating its efforts to establish an enhanced tax legislation process.
A senior researcher with the Beijing National Accounting Institute and a consultant to the State Taxation Administration, Li Xuhong, announced that the ministry was indeed close to publishing a draft of its proposed new tariff law. The State Taxation Administration is tasked to draft the country's tax laws. Li expects that a breakthrough in the tariff legislation could happen as early next year.
The new tariff law will be a significant step forward for China's economic opening-up efforts, which means that it will likely need to be finished quickly as it will relate closely to its international trade activities moving forward.
The director of the Center for Research in Fiscal and Tax Law at China University of Political Science and Law, Shi Zhengwen, believes that authorities will likely prioritize accelerating the tariff legislation process, which could lead to its completion by the end of 2020.
Under the proposed tariff law, China will likely retain the existing tax framework and tax burden levels to stabilize market expectatiions. However, tariff on specifically selected imported goods may be reduced. These items will likely include imports such as high-tech components and frozen meats, which are necessary items needed to meet domestic demand and reduce production costs.
In the meantime, China will be imposing temporary tariff rates on around 859 different imported items. The tariffs set for a specified period on the select items will reportedly be lower than existing rates imposed by other countries.
Since 2013, the Chinese government has slowly been trying to transform all existing tax-related regulations into actual laws. So far, the country has passed nine tax laws that cover 18 categories. China hopes to finalize the entire tax legislation process next year, which is the deadline for its previously announced 13th Five-Year Plan.
This year saw a lot of progress in China's effort to finalize its tax legislation process. In November, the Ministry of Finance was able to publish a draft value-added tax (VAT) law for public opinion. The specific type of tax is the largest contributor to the country's tariff income.
From January to November this year, China was able to collect total tariffs of around $37.7 trillion, a slightly 2.2 percent year-on-year drop when compared to the previous year.
