A Legal Consideration On Imposing Property Tax In China

With the gradual maturity and perfection of socialist market economy, and the increasing prosperity in real estate market, China's real estate tax system can't meet the needs of China's previous economic development in aspects of tax levy scope, tax categories, tax basis, tax rate and taxation management, and further hinders itself in playing the role of regulating economy and organizing revenue. As a result, in the Third Plenary Session of its Sixteenth Central Committee, the CPC came up with the policies that under the principles of simplifying taxation system, broadening tax basis, lowering tax rate and intensifying tax collection and administration China will advance its tax reform smoothly, launch the urban construction tax reform, and conditionally levy an unified property tax on real estate while waiving relevant charges. Appropriate tax administration power will be granted to local governments on the basis of a unified system for tax administration. At the same time, the unification of tax systems in urban and rural areas will be realized by creating conditions. Among those policies, the issue of property tax has aroused tremendous and long-lasting interests in both academic circles and the great mass of Chinese people, in addition to which, with the proposal of this issue, new round of reform on the system of real estate tax will inevitably be triggered; it is suggested that the property tax reform should be put on the agenda at this critical point with its focus on real estate tax system, as far as its distinctiveness and significance are concerned. However, as a new tax type, property tax has many limitations in its systematic design, technical preposition, and tax levy, and what's more, the academic scholars hold different yet reasonable views on this tax, so it will be a long time-consuming task to compete property tax concerning its rationality and legitimacy.Focus on the prerequisites and realistic problems in imposing property tax, this thesis will provide its readers with a reflection from perspectives of laws and systems, and also propose relevant policies.This thesis is divided into 5 parts:In part 1, the author of this thesis will render the readers a review on property tax. A brief introduction will be made concerning the connotation and features of property tax and the status quo of real estate tax home and abroad, main problems existing in China's real estate tax system will also be pointed out, which lays foundations for the policy proposal of property tax in China.In part 2, the significance of imposing property tax and the direction of the reform of real estate tax in China. The significance and functions of property tax reform in China lies in three aspects: imposing property tax can optimize the system of real estate tax, construct and complete the system of property tax, and intensify taxation administration on property market; imposing property tax can add available local finance resource, and further push forward reform of tax sharing fiscal system; imposing property tax can broaden the administrative view on tax resources, elevate the capability of taxation supervision and expand supervision scope. Last, the basic direction of real estate tax reform will be pointed out from five aspects: integrating tax categories and unifying tax system; broaden real estate tax levy scope and its objects; alternating tax basis and establishing the system of evaluation and taxation on real estate; launching charge reform and abolishing relevant charges; recognizing property tax as local revenue and granting local government more taxation right, etc. This part will further offer its readers a proper direction for property tax reform in China.Part 3 will focus on the analysis of restriction factors in imposing property tax in China. After the launch of property tax, China will inevitably face realistic problems which exist before and after the launch of this tax and need to be solved; this part offers a brief analysis of those restriction factors and divides them into social factors, administrative factors, system factors, and taxation factors.Part 4 will render its readers a summary of experience which is acquired by oversea countries in imposing property tax. Considering their differences in histories, cultures, national conditions, and tax levy practice in different countries, this chapter selects and makes a summary of oversea countries'relevant taxation experience which can be referential for China, and also paves the road for the policy proposal of property tax in the following part.Part 5 is about some suggestions to relate legal system of property tax in China. From the perspective of legislation and the dimensions of laws and systems, this part provides solutions for problems which China is faced with in imposing property tax. To be specific, these solutions fall into eight categories: elevating legislative level of tax law; properly delegating tax right to locals and avoid its abusing; further intensifying and improving validity of regulatory documents; properly designing property tax system; strengthening local legislation, realizing the legalization of coordination with other departments; constructing and completing the auxiliary system of evaluation and taxation on real estate; improving the regulation mechanism of real estate market; doing a better job on reforming the current system of real estate tax.Innovation of this thesis lies in four aspects: firstly, this thesis re-inspects the significance in and the function of imposing property tax, and supplements the idea that imposing property tax contributes to the broadening of administrative view on tax resources and the elevation of China's tax collection and administration level; secondly, this thesis urges its readers to take an objective view on property tax's function of regulating real estate market, and negates its function of stabilizing house price by analyzing its function of stabilizing land cost and house construction cost form the perspectives of supply and demand and tax shifting; so the author points out that property tax alone can't stabilize house price, and in the policy proposal part the author also suggest to further complete tax system and levy tax on industrial profiteering in order to regulate real estate market from concerning both supply and demand and to meet the regulation expectation; thirdly, this thesis highlights the importance of the constitutionality and validity of regulatory documents and record-filing system which has great significance in effective restriction on unbridled administrative behavior, and all of these haven't been mentioned in the preceding theses. Fourthly, as far as tax right is concerned, this thesis comes up with the suggestion that tax right should be granted to locals accordingly; since there is contradiction between statutory taxation principle's requirements of"collecting all that is due"and the taxation task's delegation through administrative directive, the author of this thesis comes up with the definition of tax budget which is entirely original. Due to the author's limited knowledge and research level, this thesis can not be exempt from defects, and the author will be pleased if this thesis can do some contribution in the research work, mind expansion and practice of the followers.