China will collect an estimated 17 billion yuan ($2.2 billion) after-tax profits from central State-owned enterprises, in a trial return of profits from SOEs, the online version of Caijing magazine has reported, citing sources with the Ministry of Finance.
This move, starting from October, was initiated by a State Council proposal on budgeting of State assets, issued on September 14.
The government will collect 10 percent of the after-tax profits of enterprises in oil and chemical, telecommunications, coal, power and tobacco industries. Other central enterprises shall hand in 5 percent of their after-tax profits, while scientific research institutions and military enterprises are exempted for three years.
China's State-owned enterprises reported profits of 1.2 trillion yuan last year, with the total after-tax profits reaching 625.2 billion yuan. The central SOEs had profits of 754.7 billion yuan, of which almost 70 percent was contributed by nine large corporations, such as China National Petroleum Corporation (CNPC), China Telecom, and the State Grid.
The ministry will collect half of the required profits from 2006 on a trial basis this year, an estimated 17 billion yuan.
"We only collect a small proportion of the profits, and the remaining part will be sufficient for the enterprises to carry out their reform and development plans," said the ministry.
The policy will be officially implemented from 2008.
Since 1994, central State-owned enterprises have retained all their profits in their own coffers.
There are 168 central enterprises under the supervision of the State-owned Assets Supervision and Administration Commission.