Tax Reform And Government Financial Resource During The Early Period Of Nanjing National Government (1927-1937)

In order to strengthen the government's financial resource and maintain the stability of the political power, Nanjing National Government soon began to rebuild a new finance and taxation system according to the capitalism theory of finance and tax revenue after being established. This reform started in July 1927, and had to stop after the Anti-Japanese War erupted in 1937. This reform included the compartmentalization of financial income and expenses of central and local government, the return of tariff and salt tax dominion, revise of tariff regulation, reform of salt tax system,the abolition of the Likin system, the establishment of consolidated tax, the regulation of feudal land tax and the establishment of new tax. Till 1936, a central tax system with tariff, salt tax and consolidated tax as the principal part, and a local tax system with feudal land tax, sales tax and contract tax as the principal part, had been establishment. At the same time, income tax had been establishment before the Anti-Japanese War erupted in order to promote a farther reform of tax system, which laid a foundation for the direct tax system.This tax system reform was significance for Nanjing National Government. Although this choice was made by force of domestic and overseas situation, on the other hand, it was a reform that complied with the time. China's tax system had transformed from feudal tax system which suits the small peasant economy to the capitalism tax system by the reform. The rudiment of modern capitalism tax system had formed, which greatly strengthened Nanjing National Government's finance and economics status, and consolidated this government's rule. The main point of this text is, achievements of Nanjing National Government's tax system reform during the early period are worthy of recognition. The role of government in the reform is worth to be discussed. This reform also can be used as a source of reference for China's tax system reform at the present stage. Although the new tax system had obvious characteristic of reforming time, progress and backwardness coexisting, the transformation from feudal tax system to the capitalism tax system had basically been realized.This paper attempts to analyze the government's tax reform during the early period empirically, and try to judge the tax system reform from the point of government financial resource together with Wagner's principles.