China's current tax framework was put in place after the tax reform in 1994 to meet the needs of the socialist market economy. Since the beginning of 21st century, the Chinese government has made a series of adjustments of and improvements to the tax system, which have guaranteed the government's revenue stream and contributed to the country's rapid economic growth.
Current Tax System
There are 18 different kinds of taxes in China, which can be divided into three categories according to their nature.
◆ Goods and services taxes: VAT, Excise Tax, Business Tax, Vehicle Purchase Tax and Customs Duty. (See Table 3)
◆ Income taxes: Corporate Income Tax and Individual Income Tax. (See Table 4)
◆ Property and behavior taxes: Land Appreciation Tax, Real Estate Tax, Urban and Township Land Use Tax, Arable Land Use Tax, Deed Tax, Resources Tax, Vehicle and Vessel Tax, Stamp Duty, Urban Maintenance and Construction Tax, Tobacco Tax, and Vessel Tonnage Tax. (See Table 5)
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