BEIJING, Dec. 29 (Xinhuanet) -- China's
2,600-year-old agricultural tax will be rescinded as of Jan. 1, 2006, after
China's top legislature voted on Thursday to adopt a motion on the regulations
revoking the agricultural tax.
The motion with only 94 Chinese characters was voted
favorably by 162 lawmakers and abstained by one.
Wan Baorui, former vice minister of agriculture and
vice chairman of the Agriculture and Rural Affairs Committee of National
People's Congress told Xinhua that the abolition of the agricultural tax
demonstrates that industry has outgrown agriculture to some extent along with
the country's economic development. And the country ushers into a new era of
"industry subsidizing agriculture".
Official figures show that agriculture contributed to
13.1 percent of the nation's gross domestic product (GDP) in 2004, and industry
and tertiary trade contributed to 46.2 percent and 40.7 percent respectively.
Agricultural tax, China's most ancient tax category,
started to be collected in 594 BC. From that time, agricultural tax has existed
for 2,600 years in China with dominant rural economy.
During the more than 2,000 years, agricultural tax
was always the main source of the country's coffer. Since the founding of the
People¡¯s Republic of China in 1949, agriculture has made great contribution to
the country's economic development.
In 1953-1985 period, Chinese government purchased
grains, cotton and other agricultural products with unified prices which were
much lower than the prices in free market, so as to save money for developing
In this way, Chinese farmers contributed 600 billion
to 800 billion yuan (about 75 billion US dollars - 100 billion US dollars) to
the country's industrialization.
Over recent years, the gaps between city and
countryside, urban citizens and rural residents were widened. Therefore, solving
issues concerning agriculture, countryside and farmers have turned to be the
urgent task for the Chinese government.
In 2005, the Chinese government and the Central
Committee of the Communist Party of China vowed to construct a "new countryside"
so as to narrow the gap between city and countryside.
Wan said, the abolition of agricultural tax was only
one of the important steps to fulfill the construction of the "new countryside".
Statistics, released by the National Bureau of
Statistics in December, showed that currently the proportion of primary,
secondary and tertiary sectors in the GDP has changed to be 13:46:41.
"It demonstrated that the country's industry system
has been in shape and the time for industry subsidizing agriculture has been
ripe," said Wan.
Several signs have illustrated that the construction
of "new countryside" was by no means a slogan, but a top issue in government's
Last week, Premier Wen Jiabao announced at an
executive meeting of the State Council that tuitions for nine-year compulsory
education in rural areas will be exempted within two years. And the central
government and local governments at various levels will allocate a total of
218.9 billion yuan (27.36 billion US dollars) to subsidize compulsory education
in rural areas in five consecutive years from 2006.
In public finance sector, the government has
remarkably intensified investment in rural areas over recent years. The public
spending on issues concerning agriculture, countryside and farmers increased by
more than 50 percent from the figure for 2002.
In 2004, the State Council exempted and reduced
agricultural tax in trial in certain provinces. In 2004 alone, 50 billion yuan
worth of agricultural taxes were exempted for 800 million farmers. Or say, the
annual per capita income for Chinese farmers increased by 63 yuan, or 2.1
percent from the previous year.
Wan said the abolition of agricultural tax also
sharpened the country's agricultural competitive edge in the international
market. Giving that China has 86.7 million hectares of farmland, the abolition
of agricultural tax means the per hectare grain production cost dropped by 570
yuan, or 10 percent - 20 percent from the figure of previous year.