A motion on abolishing the regulation concerning the agricultural tax was submitted to a legislative session of China's top legislature, for deliberation and approval on Saturday.

China's more than 2,000 years old agricultural tax will be annulled if the motion is approved at the 19th session of the Standing Committee of the 10th National People's Congress, which is held in Beijing from Dec. 24 to 29.

Liu Jibin, vice director of the Financial and Economic Committee of the NPC, said with decades of economic development, the country has established a fine industry system, whereas the gap between the industrial sector and the agricultural sector and the gap between cities and the countryside have widened.

"In a bid to narrow the income gap between urban and rural people, it is necessary to scrap agricultural tax. Moreover, abolishing agricultural tax is conducive to building up a unified tax system for urban and rural residents," he said.

Agricultural tax emerged in China as early as in the Warring States Period (475-221 BC). Then agricultural tax was collected in almost every feudal dynasties.

In 1958, the NPC adopted the Regulation on Agricultural tax.

Feng Shuping, vice director of the Commission for Budget Affairs under the NPC Standing Committee said since the founding of the People's Republic of China in 1949, the Chinese government had always upheld the principle of increasing grain output and reducing taxes.

In 1949, a grain tax equivalent to 28 kilograms a year was imosed on a farmer, while the sum was reduced to 13 kilograms in 2000. And the annual grain output increased remarkably during the period of time.

She said abolishing agricultural tax would help reduce farmer's economic burden, increase their income and sharpen the country's agricultural sector's competitive power.

In March 2004, Premier Wen Jiabao announced in his annual government work report that the central government would reduce agricultural taxes year by year and eventually annul them.

Since then, 28 provinces have decided by themselves to remove agricultural taxes, exempting 800 million farmers from tax burden worth of 50 billion yuan.

The government's endeavor of reducing and abolishing the agricultural tax has accumulated experiences for the country's top legislature to finally remove the category of agricultural tax, Liu said.

He said the economic losses caused by agricultural tax abolishment was within the country's fiscal capacity to handle.

Statistics show that agricultural tax revenue accounted for 39 percent of the country's total tax revenue in 1949, sharply down to merely one percent in 2000. In 2005, the government only collected about 1.5 billion yuan of agricultural tax. Therefore, abolishing agricultural tax will not affect the country's financial revenue too much, he said.

He said abolishing agricultural tax will reduce local fiscal revenues. For the economic well-developed provinces, the losses caused by the abolishment were handled by themselves, and for those backward western provinces or grain produce bases, the central government earmarked 35.66 billion yuan in subsidy in 2005.

Related story:

China to scrap agricultural tax: minister

Chinese Finance Minister Jin Renqing said Monday that China will scrap all agricultural taxes, putting an end to a levy that has burdened China's farmers for 2,600 years in China.

An expert with the State Administration of Taxation said the tax cuts come four years ahead of schedule. Just last year Chinese Premier Wen Jiabao made the commitment to eliminate agricultural taxes within five years.