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Local government downsizing eases farmers' tax burden
Updated: 2004-03-04 14:04

A total of 7,400 town-level administrations have been abolished or merged over the past five years, as the Chinese Government attempts to alleviate the tax burden on its farmers.

The total number of the towns in China has fallen from 464,000 to 390,000 thanks to a campaign conducted in 25 provinces, municipalities and autonomous regions since 1998.

Towns are the lowest administrative structure in the country and their redundant institutions and personnel imposed heavy tax burdens on farmers.

It is estimated that 40 percent of farmers' taxes went to overstaffed town-level administrative structures, requiring an average 68 farmers to finance each cadre.

The burden was aggravated by a number of town governments splurging on well-furnished office buildings and the construction of grand plazas.

In the wake of taxation reform, China began to rationalize small towns five years ago. "Only when the overstaffed small towns were abolished, could the farmers' tax burdens be lightened," said Chen Xiaohua, director of the Policy and Regulations Bureau under the Ministry of Agriculture.

He said about 5,000 staff were cut and 60 million yuan (US$7.2 million) saved from 126 abolished or merged towns in northwestern China's Ningxia Hui Autonomous Region.

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