The stamp tax on securities trading has been raised from 0.1 percent to 0.3
percent beginning today, the Ministry of Finance said late last night.
A woman blows a bubble gum at a stock exchange market in
Shanghai May 29, 2007. China has raised stamp tax on securities trading
has been raised from 0.1 percent to 0.3 percent beginning Wednesday, May
30, in an effort to cool the overheated stock market.
An official with the ministry said the tax increase is intended to help
promote the healthy development of the securities markets; and analysts said the
move is to cool the over-heated market.
The tax rise will cover buying and selling of both A and B shares. It will
also apply to inheritance and endowments.
The government lowered the rate from 0.2 percent to 0.1 percent in January
2005 in an effort to boost the then bearish market.
But from early last year, the market value has quadrupled as millions of
retail investors joined the market frenzy, sending indices to record highs
The benchmark Shanghai Composite Index yesterday closed at an all-time high
of 4334.92 points, up 1.47 percent.
The smaller Shenzhen Component Index closed at 13456.6, up 3.3 percent.
The two bourses registered a combined turnover of 378.37 billion yuan ($49.5
billion), slightly lower than the record 394.22 billion yuan from the previous
China has collected more than 100 billion yuan ($12.8 billion) in stamp tax
on stock transactions since the early 1990s, when it was first