China to abolish age-old grain tax
By Peter Morris
The grain tax, one of China's oldest institutions, is due to be phased out over the next few years, Premier Wen Jiabao said recently in a speech to the National People's Congress (NPC). Records indicate that grain taxes have been collected for at least 4,000 years, providing the bulk of imperial China's government revenues. Along with levies on textiles, compulsory military service and corvee labor obligations, annual (and sometimes twice-annually) grain taxes have been one of the core responsibilities of people living under the yoke of successive Chinese empires.
In the modern era, emperors have given way to reformers and technocrats. Premier Wen, along with President Hu Jintao and other technocrats representing the Chinese Communist Party's (CCP's) "fourth generation" of leaders, have singled out misguided agricultural policies and rural poverty as the primary factors contributing to China's lopsided economic development.
Beginning this year, the 8 percent agricultural tax rate will be reduced gradually until it is scrapped entirely within five years, with greater reductions for major grain-producing areas and producers. In addition, except for tobacco, the tax on special agricultural products will be abolished altogether as of this year. The move is expected to cut the financial burden on farmers by US$580 million annually.
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