New tax rate will not take the shine off Shenzhen: experts

On March 16, the fifth session of the 10th National People's Congress passed a new corporate income tax law that will fix a flat tax rate of 25 percent for both domestic and foreign enterprises.

The new rate, which will lower the rate domestic firms pay while raising the rate foreign outfits pay, will take effect on January 1, 2008.

Though the move has been hailed as an attempt to level the corporate playing field, there is some concern over the effect this new rate might have in the Shenzhen special economic zone, where both foreign and domestic enterprises are currently entitled to a tax rate of 15 percent. However, such concerns are misplaced, several experts, entrepreneurs and senior government officials said recently.