Tax-sharing to spark relocations

The relocation of enterprises within the Beijing-Tianjin-Hebei area will be facilitated by a tax-sharing arrangement intended to pacify governments that fear losing revenue when companies leave their jurisdictions.

The plan, announced by the Ministry of Finance on Wednesday, will compensate governments by providing a three-year transitional period, during which the original government can get 50 percent of value-added, corporate income and business tax payments.

But not all relocated enterprises in the megalopolis will be covered. Only those subordinate to local governments' plans, and major companies that have paid an annual average of 20 million yuan ($3.2 million) in the three years prior to the relocation, will be included.