Finance Minister Jin Renqing delivers a report at the plenary meeting of the NPC.(Newsphoto)

Finance Minister Jin Renqing and the nation's taxation chief Xie Xuren should expect to be deluged with questions on reforming China's taxation system when they go before a press conference set for this afternoon.

The questions will represent a continuation of a nationwide debate on the reforms that have gone on for years. The debate has grown louder in 2004 when financial authorities pushed hard for the adoption of a unified corporate income tax, which would mean higher rates for foreign-funded enterprises.

The debate did not generate results last year.

So it is just natural that tax reform is among the hottest of topics during the ongoing session of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC).

Dozens of formal proposals and speeches have been centring on the topic. In addition to reforming the corporate income tax system, NPC deputies and CPPCC members have urged a more just personal tax system to be established, along with the enactment of a Taxation Code, in effect a basic law for taxation.

China's tax collectors now follow the 1991 Foreign-funded Enterprise and Foreign Enterprise Corporate Income Law, which stipulates a 15 per cent rate for such firms, and the 1993 Provisional Rules on Corporate Income Tax, which set a 33 per cent rate for enterprises funded wholly by domestic investors.

"The difference unfairly put domestic enterprises at a disadvantageous position in competing with foreign peers," said Xu Yulin, a CPPCC member and deputy director of the State Council's Legal Office.

In addition, tax experts said in an era when tax reductions are the trend, the 33 per cent should also be cut.

Xu said relevant departments have drafted a plan for unifying policy, with a single rate of around 25 per cent. That rate is at the middle-range among rates adopted by other countries.

The plan also proposes a transition period of between two or three years to help foreign-funded firms adjust to the new taxation level.

However, the plan has met with strong opposition from those who say a unified rate will dampen foreign investment growth. They worry that China will become less competitive when many Asian neighbours are trying harder to attract overseas investors.

(China Daily)

unified : formed or united into a whole（统一的，统一标准的）

enactment: the passing of a law by a legislative body（设定，制定）