Laws of the People's Republic of China

CONSOLIDATED INDUSTRIAL AND COMMERCIAL TAX
REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA
(DRAFT)

 Adopted at the 101st meeting of Standing
Committee of the National People's Congress on 11
September 1958 and promulgated on 13 September 1958

 

SUBJECT: TAXATION

ISSUING-DEPT: STANDING COMMITTEE OF PEOPLE'S CONGRESS

ISSUE-DATE: 09/10/1958

IMPLEMENT-DATE: 09/13/1958

LENGTH: 2403 words

TEXT:

[Article 1] With a view to adapting the system of industrial and commercial taxation to the condition of the socialist economy, promoting the development of production and ensuring the supply of funds for national construction, these Regulations are formulated to simplify and incorporate the Commodity Tax, the Commodity Circulation Tax, the Business Tax and the Revenue Stamp Tax into the Consolidated Industrial and Commercial Tax.

[Article 2] All units or individuals engaged in the production of industrial products, the purchase of agricultural products, the importation of foreign goods, commercial retailing, communications and transportation and all other service trades are taxpayers of the Consolidated Industrial and Commercial Tax (hereinafter referred to as the "Consolidated Tax"), and shall pay the Consolidated Tax in accordance with these Regulations.

[Article 3] The taxable items and rates of the Consolidated Tax are specified in the annexed schedules.

The addition, deletion or adjustment of any individual taxable items or rates shall be determined and promulgated for implementation by the State Council.

[Article 4] Taxpayers engaged in the production of industrial products shall, after the sale of the industrial products, compute the tax at the specified rates on the basis of the proceeds received from the sale.

Products manufactured by industrial enterprises and used in their own production shall not be subject to taxation.  However, certain individual items among such products which are taxable according to the taxable items and rate schedule of these Regulations shall be dealt with in accordance with such provisions.

[Article 5] Taxpayers engaged in the purchase of agricultural products shall, after the purchase of the products, compute the tax at the specified rates on the basis of the amounts paid for the purchase.

[Article 6] Taxpayers engaged in the importation of foreign goods shall, after the importation of the goods, compute the tax at the specified rates on the basis of the amounts paid for the import.

[Article 7] Taxpayers engaged in commercial retailing shall, after the sale of goods, compute the tax at the specified rates on the basis of the proceeds received from the retail sale.

[Article 8] Taxpayers engaged in communications and transportation and all other service trades shall, after receipt of the proceeds, compute the tax at the specified rates on the basis of the business proceeds received.

[Article 9] On products consigned to an industrial enterprise for processing, the consigner shall pay the tax.  In the event that the consigner is an industrial concern, the tax shall be paid in accordance with the provisions of Article 4 of these Regulations.  If the consigner is not an industrial concern, the tax shall be paid either by the consignee on behalf of the consigner at the time when the products leave the factory or by the consigner at the time of taking delivery.

[Article 10] Business proceeds of state banks, insurance operations, agricultural machinery stations or medical and health services, and proceeds of scientific research institutions from experiments made, are exempt from the Consolidated Tax.

[Article 11] Where tax incentives are deemed necessary, tax reductions or tax exemptions may be available for proceeds received by public canteens and other public services run by agricultural production cooperatives or by urban neighbourhood organizations, proceeds received from the purchase and sale undertaken by the supply and marketing departments of agricultural production cooperatives on behalf of state enterprises, and proceeds of the productive undertakings operated by schools under work-study programmes.

[Article 12] Tax reductions, exemptions and alterations at the point of imposition on certain products within the limits of the jurisdiction of any province, autonomous region, or municipality directly under the central government shall be dealt with by the respective People's Council in accordance with the tax jurisdiction as vested by the state.

Tax reductions, exemptions and alterations at the point of imposition on products within the limits of national jurisdiction shall be specified by the State Council.

[Article 13] Taxpayers and tax authorities should bring into full play the spirit of cooperation in taxation.  Taxpayers shall pay taxes correctly and promptly and, on their own initiative, furnish the tax authorities with the required information.  The tax authorities shall actively assist the taxpayers to fulfill tax payment formalities, and shall promptly deal with taxpayers' suggestions concerning the improvement of taxation.

[Article 14] The time limits for making tax payments by the taxpayers shall be determined separately by the tax authorities in accordance with the amounts of tax payable and the business conditions of the enterprises concerned.

[Article 15] In the event that a taxpayer fails to pay tax within the prescribed time limit, the tax authorities in addition to setting a deadline for the payment, shall surcharge an overdue fine at one tenth of one (0.1%) percent of the overdue tax for every day in arrears, starting from the first day of default.

[Article 16] In dealing with taxpayers the have evaded or underpaid taxes, the tax authorities may in addition to pursuing the tax payment, subject the taxpayers concerned to criticism or impose a fine of not more than five times the amount of tax evaded or underpaid, according to the seriousness of the offence.  Cases of gross violation shall be dealt with by the people's courts.

[Article 17] For the levy of the Consolidated Tax on agricultural production cooperatives, the members thereof and individual peasants, and on the remnant capitalist businesses, individual handicrafts, small traders and pedlars and businesses of temporary nature, the People's Council of a province, an autonomous region or a municipality directly under the central government shall, in accordance with the tax jurisdiction as vested by the state, separately formulate taxation measures and report to the State Council for record.

[Article 18] Detailed rules and regulations for the implementation of these Regulations shall be formulated by the Ministry of Finance of the People's Republic of China.

[Article 19] These Regulations shall come into force from the date of promulgation, thereby annulling "The Provisional Regulations for the Commodity Tax".  "The Trial Measures for the Commodity Circulation Tax", the section concerning the Business Tax in "The Provisional Regulations for the Industrial and Commercial Tax".  "The Provisional Regulations for the Revenue Stamp Tax" and all the stipulations connected therewith.

Taxable Items and Rates of the Consolidated Industrial and Commercial Tax

1 Industrial and Agricultural Products

Taxable Item	Tax Rate	Description
	(%)
Cigarettes:
Grade A	69
Grade B	66
Grade C	63
Grade D	60
Grade E	40
Cigars	55
Cut Tobacco	40
Smoked Tobacco Leaf	50
Native Tobacco Leaf	40
Wines and Spirits produced		†Wines and spirits produced by any enterprise and used in its own production shall be subject to tax at the specified rates.
from cereals:
White and Yellow Wines	60
Beer	40
Native Sweet Wine	40
Wines made from substitutes	20
Wines made from fruits	30
Reprocessed Alcoholic Drinks	30
Alcohol:
Spirits made from cereals	30
Spirits made from substitutes	20
Spirits made from wood (methyl	20
††alcohol)
Sugar:
Refined sugar	44
Native sugar	39
Saccharine	44
Maltose	27
Tea	40
Cereals	4
Wheat Flour	10
Vegetable Oils	12.5
Seafoods:
Seafood Cucumber, Fish Maw, Shark's	35
††Fin, Fish Lip, Abalone, Conpoy
Others	5
Fresh-water Products:
Fish, Shrimps, Crabs	5
Tremella, Bird's Nest	35
Soda Water, Fruit Drinks, Fruit	25
Syrups, Fruit Juices
Gourmet Powder, Essence of Soy	25
Milk Powder, Condensed Milk,	10
Evaporated Milk
Fresh Cow's Milk. Ewe's Milk	2.5
Canned Foods	10
Egg Products	10
Cotton Yarn:	26% for	†Cotton Yarn manufactured by any enterprise and used in its own production shall be subject to tax at the specified rates.
Grey	30
Singed	counts
Made of Artificial Fibre	or
	over;
	23% for
	Less
	than 30
	counts
Cotton Piece Goods:
Grey	1.5%
Printed or Yarn Dyed	5%
Native Cloth:
Interwoven with hand-spun and	8%
††machine-spun yarns
Woven with hand-spun yarns	12%
Cotton Blankets, Cotton	6%
Thread Blankets
Ramie, Flax, Hemp, Jute:
Machine-made or partly	19%
††machine-made
Gunny Bags, Burlap:
Machine-made or partly	10%
††machine-made
Piece Goods:
Made of ramie or flax	15%
Fire Hose
Woolen Yarn, Woollen Thread:
Spun with native wool	15%
Spun with imported wool	35%
Woollen Piece Goods:
Woven with native wool	15%
Woven with imported wool	35%
Felt. Wool Fabric for Industrial	25%
††Use
Woollen Blankets	15%
Carpets	6%
Silk:
Natural Silk, Spun Silk, Silk	15%
Wadding, Artificial Silk
(Rayon)
Silk Piece Goods:
Grey	2%
Printed or Dyed	6%
Wool Products:
Felt, Felt Blankets, Felt Clothes.	12%
Felt Caps. Felt Shoes, Felt Boots.
Felt Socks. Woollen Hats. Woollen
Hat Bodies
Hides	20%
Leather:
Made of cow hide	40%	The leather processed in any enterprise and used in its own production shall be subject to tax at the specified rates.
Made of other hide	20%
Furs	20%
Sheep Wool, Goat Wool, Cashmere,	10%
Camel Hair, Camel Wool, Horse's
Mane, Horsetail Hair, Feathers
Pig's Bristles	16%
Mechanical Pulp, Chemical Pulp	3%
Ordinary Paper	10%
Remanufactured Paper:
Stencil Paper, Art Printing Paper,	10%
Photographic Paper, Glazed Paper,
Printed or Coloured Wall Paper,
††Crepe
Paper, Crepe Paper in Rolls,
††Moistureproof Paper. Blue-print
††Paper, Transfer
Paper for Deal
Cigarette Paper	18%
Special Papers:
Gold-foiled Paper.	20%
Silver-foiled Paper, Copper-foiled
††Paper,
Tin-foiled Paper,
††Aluminum-foiled
Paper, Cellophane
Fountain Pen:
Pens with Gold Nib, Ball-point	22%
††Pens
Pens with Iridium-tipped Nib,	17%
††Pens with
Stainless Steel Nib,
Parts and Accessories	17%
Pencils	6%
Matches	23%
Vacuum Flasks:
With Metal Casings	19%
With Bamboo Casings	14%
Vacuum Flask Refills	14%
Aluminum Appliances and Utensils	15%
Enamelware	15%
Glassware	15%
Pottery and Porcelain ware	11%
Bicycles and parts	13%
Clocks and Watches:
Clocks	25%
Wrist Watches, Pocket Watches	35%
Cameras	25%
Photographic Film in Rolls,	35%
Photographic Plates
Gramophone Records	15%
Radio Sets, Amplifiers, Tape	13%
††Recorders,
TV Sets, Gramophones
Cosmetics:
Scent Perfume, Perfume Essence,	51%
†Perfume Powder, Florida Water,
†Lipstick, Nail Polish, Rouge,
†Face Cream, Hair Lotion, Hair
†Wax, Hair Oil, Face Lotion, Face
†Oil, Eyebrow Pencil
Talcum Powder	30%
Prickly Heat Powder	15%
Perfumed Soap, Tooth Paste,	17%
††Perfumed Grease Packed in Clam
††Shells
Soaps, Medicated Soaps	12%
Tooth Powder, Shoe Polish, Shoe	6%
††Powder, Glycerine
Electric Wire	11%
Electric Bulbs, Neon Tubes,	15%
††Fluorescent Tubes, Flash Light
††Bulbs, Electronic Tubes
Batteries:
Electric Cells or Batteries,	12%
††Storage Batteries
Electric Fans:
Ceiling Fans, Desk Fans, Wall Fans	25%
Printing Ink	10%
Paints:
Lacquer, Chemical Paint	16%
Glue:
Animal Glue, Liquid Glue,	16%
††Waterproof Glue, Glue for
††Printing and Dyeing, Yellow
††and White Glue Powder
Natural Resin
Digments, Dyes	16%
Rubber Products:
Rubber, Tyres, Rubber Belts	10%