A Trial Observation On China's Policy Of Taxation Subrogation Right And Its Improvement

Taxation is the major component of modern country's fiscal revenue and at the same time functioning as a regulator of macroeconomic operation. However, on the one hand, enterprises are subject to sudden and unpredictable changes due to the severe market competition so that they cannot pay taxes in time; on the other, poor taxation awareness, serious tax arrears and evasions make it an imperative for the government to set up a developed legal system to secure the taxation process. As is stipulated in Article 50 of Administration Law on Tax Collection promulgated on April 28, 2001,'in case that the obliged tax payer delays or waives the exercise of due creditor's right, or transfers the property without charge or dispose the property at a evidently unreasonable price while the transferee is aware of such unreasonableness where impairs the government taxation income, the competent taxation authority is entitled to exercise subrogation right and cancellation right according to the stipulations of Article 73 and 74 in Contract Law'. This is a simple transplantation to Administration Law on Tax Collection from the subrogation right of China's civil law or a theoretical development. Notwithstanding, due to the stipulated principles, taxes are rarely collected via taxation subrogation right by taxation authorities. From the legal characteristics of taxation subrogation right and based on the observation of both the theoretical system as well as practical situation, the author proposes how the taxation authorities shall exercise the taxation subrogation right and further analyzes the existing plight they are faced with during the process of such exercise; the author also makes pertinent proposals on the essential elements of taxation subrogation right, procedures of its exercising, and relevant policies and systems, etc. for further development and improvement.