Research On Unification Of Rural And Urban Taxation System

In this paper, the author justifies that unification of rural and urban taxation system is the only tragedy to achieve the goal of rural and urban unified planning and ultimately solve the problem of farmers and farming industry. Based on a comprehensive argumentation on necessity and feasibility of rural and urban taxation system unification and experiences from other countries, ideas of future reformation of rural taxation system are proposed considering unique national conditions of China. That is, to abolish the current rural taxation system, follow the principle of taxation impartiality and ability determined responsibility, collect taxes from farmers and farming industry in the same way as how it is implemented for urban residents and business so that a modern taxation system of unified policy and impartial responsibilities can be established for the entire society.According to dependence principle of policy modification, research on farming related taxation system reformation in this paper uses urban business industrial taxation system that was reformed in 1994 as its institutional frame and is based on the condition of total abolishment of current farming tax in order to avoid exorbitant reformation cost.The paper is divided into six sections. Firstly, by analyzing historical reasons of formation of considerable discrepancies between rural and urban taxation system, it is pointed out that the difference between these two systems was reasonable in the past but not any more. Under current social economic conditions, continuous use ofthe system dees not meet the development requirements of farming industry. Secondly, by analyzing the discrepancy between the existent urban and rural taxation system and disadvantages of the latter, the paper explains the consequences of keeping the existent system. Then, the paper describes definition, standard, theoretical and realistic meaning of rural and urban taxation system unification. It justifies the necessity and feasibility of this unification by focusing on the following arguments. One is that since agricultural tax is abolished, is it necessary to initiate another kind of tax. In another word, tax or tax free. The other one is how to deal with rural area and urban area, more precisely, unification or differentiation. At the end of the paper, rough guideline of taxation system reformation is proposed based on experiences of other countries and current social economic conditions of China. Thaf \s, to follow the current urban business industrial taxation regulations, count eligible farmers as urban tax payers; collect value-added tax on agricultural products; income tax on agricultural income and land tax as well as estate tax which are unified for urban and rural areas. Preferential policies for farmers and unification of tax collection and management system are also taken into account.Innovaticn&i aspects of this paper are as follows. First of all, the whole argumentation is based on the assumption that agricultural tax is all abolished. As a result, the discussion covers necessity and feasibility analysis for the transit from tax free to tax collection and from partitioned tax collection to unification of rural and urban taxation system. Secondly, it presents an overall and thorough justification of necessity and feasibility of rural and urban taxation system unification. Thirdly, combined with unique economic conditions of China, the paper analyzes and concludes taxation experiences of other countries that can be used as references in the future. Lastly, based on these experiences of other countries, constructive suggestions are made for farming related taxation system reformation.