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Further release of fee burdens for businesses underway

Updated: Feb 14,2017 8:20 AM     english.gov.cn

Last year witnessed a huge reform of replacing business tax with value-added tax, which, according to official data, relieved more than 500 billion yuan ($72.8 billion) for the nation’s business sectors.

But even with these efforts, some enterprises still say they are enduring a “heavy burden”.

The problem of the lingering burden lies in administrative fees for enterprises, which are charged by government departments or organizations for their specific services.

To get rid of such financial burdens, the State Council executive meeting, hosted by Premier Li Keqiang on Feb 8, decided to further regulate administrative fees on enterprises.

Room remains for further fee reductions

In addition to taxes, enterprises usually have to pay fees to government departments and certain organizations.

Take Wahaha for example. The largest beverage enterprise in China paid a huge total of 212 fees in 2015.

Even though some are not paid directly to government departments, a portion of the fees are received by intermediary organizations whose establishments are approved by the government.

So there remains huge room for further elimination of redundant fees for enterprises as such efforts are also significant measures to promote structural supply-side reform.

Clear list and regulation on fees

To deal with these problems, the focus will be on eliminating unreasonable administrative fees, forbidding fees by intermediary organizations who take advantage of their official title, and reducing discretion regarding fees on enterprises.

Transparent lists of fees on enterprises will be open to the public, which means government departments and social organizations must strictly follow the lists and are forbidden to take even a dime from enterprises not included on the lists.

Taxes are levied according to laws as well as fees. Further regulations should be carried out to decide which should be kept or abandoned, said Liu Shangxi, head of the Chinese Academy of Fiscal Sciences.

The enhanced efforts to reduce fees on enterprises hope to provide a favorable business environment and stimulate the market. Administrative fees should be received by governments on the basis of relevant laws, according to Liu Jianwen, a professor at the Peking University Law School.

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