Source: CCTV.com

12-25-2006 10:41

Foreign and domestic businesses in China may get a flat corporate income tax of twenty-five percent. It's under discussion by the Standing Committee of the Tenth National People's Congress, which opened Sunday morning. The six-day session will also cover several other draft laws.

In his report on the draft corporate income tax law, Finance Minister Jin Renqing said local businesses are facing tough competition as they're enveloped by the world economic system.

Foreign companies in China have been taxed at fourteen or twenty-four percent since the nineteen-eighties. It's been considered necessary to attract foreign funds to drive the country's development.

But Chinese companies pay thirty-three percent. Now, calls by domestic businesses for a more equal tax system are now being heard. They hope will be created where it's also more difficult for both foreign and domestic companies to use loopholes to pay even less.

The solution may be an across-the-board twenty-five percent corporate tax.