Tracking China’s Progress Towards Law-Based Taxation


China currently collects 18 types of taxes. They will generate an estimated total of 8 trillion RMB in revenue for the Central Government in 2018. But only six of them—providing only about a third of the central tax revenue—are imposed by laws [法律] enacted by the legislature, the NPC or its Standing Committee (NPCSC). The rest are governed only by interim regulations [暂行条例] adopted by the State Council—the Central Government itself. The enormous taxing power the State Council now wields was in fact granted by the NPC in 1984. Now, over three decades later, the NPC is reclaiming that power by gradually elevating the interim regulations into laws, with an eye to complete the process by 2020. In this post, we will explain why the NPC made the power grant in the first place and discuss what it has recently been doing to reassert its control over taxation.

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NPC Calendar: July 2018 (UPDATED)

UPDATE (July 1, 2018): This post has been updated with information from this news release. We will not separately report on the NPCSC’s special session this month unless the resolution contains especially newsworthy content.

The Tobacco Leaf Tax Law (烟叶税法), Vessel Tonnage Tax Law (船舶吨税法), revised Specialized Farmers’ Cooperatives Law (农民专业合作社法), and Decision on the Exercise of Maritime Rights Protection and Law Enforcement Authority by the China Coast Guard (关于中国海警局行使海上维权执法职权的决定; see this post for details) take effect on July 1.

The NPC Standing Committee (NPCSC) is currently soliciting public comments on the following bills through July 28, 2018 (see this post for details):

The NPCSC will convene a special session on July 9–10 to hear a report on inspecting the enforcement of the Atmospheric Pollution Prevention and Control Law (大气污染防治法). In conjunction with hearing the report, the NPCSC will conduct a special inquiry (专题询问) (which senior State Council officials are expected to attend to answer questions) and adopt a resolution related to one of the Communist Party’s three ongoing “tough battles” (攻坚战): preventing and controlling pollution.

The NPCSC’s next regular session will take place in late August.

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NPCSC Passes Two Tax Laws and “Confirms” Constitutionality of Hong Kong-Mainland Joint Checkpoint Plan

The NPC Standing Committee (NPCSC) concluded its last session in 2017 on December 27, with the passage of three legislative bills and two decisions. As usual, in this blog post we will summarize and explain the actions taken by the NPCSC yesterday, with a focus on the approved Hong Kong-Mainland Cooperation Agreement regarding the joint checkpoint plan for a cross-border high-speed rail.

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NPCSC to End 2017 with Blockbuster December Session (UPDATED)

UPDATE (Dec. 23, 2017): The NPCSC has released the finalized agenda and daily schedule of the ongoing session. This agenda, unlike the agendas of past December sessions since the early 1990s, does not include a draft decision to convene the NPC session of the following year (which would be the 1st Session of the 13th NPC). This is highly unusual. But the significance (if any) of the absence of that decision is not clear at this point. Elsewhere, in a report on the draft Supervision Law (as reported by state media), the NPC Law Committee seemed to be deliberately avoiding referring explicitly to the 1st Session of the 13th NPC: It recommended that the NPCSC submit the draft Supervision Law to “a session of the NPC” (全国人民代表大会会议) for deliberation, short of identifying the specific NPC session (unlike what it had done before). Through this update we merely wish to point out these irregularities. It is still premature to speculate whether the 2018 NPC session will convene as usual on March 5 because the Council of Chairmen could always add a convening decision to the agenda (though it doesn’t explain why it hasn’t done so already). In any event, we will find out on December 27 when the ongoing NPCSC session closes.

As predicted, the Council of Chairmen met on Thursday (December 14) to set the dates and propose an agenda for the second last session of the 12th NPC Standing Committee (NPCSC). According Xinhua’s report of the Council’s meeting, an astonishing 12 legislative bills (among others) were submitted to the upcoming six-day NPCSC session (December 22–27) for deliberation, the most ever since the start of the 12th NPC. Most of these bills are worth paying close attention to because of their subject matters, as we will discuss below.

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NPCSC Solicits Public Opinions on Draft E-Commerce Law, Amendment to Rural Land Contract Law & Vessel Tonnage Tax Law

UPDATE (Nov. 20, 2017): An English translation of the draft amendment to the Rural Land Contracting Law is now available. See link below.

In addition to the draft Supervision Law, the NPC Standing Committee (NPCSC) is now also soliciting public opinions on the following three draft laws. The comments period for each is noted below.

  1. E-Commerce Law (Draft for 2nd Deliberation) 电子商务法草案二次审议稿: Nov. 7, 2017 – Nov. 26, 2017
  2. Rural Land Contracting Law (Draft Amendment) 农村土地承包法修正案草案: Nov. 7, 2017 – Dec. 6, 2017. An English translation of the draft amendment is available here. The NPCSC has released an “authoritative explanation” (权威解读) of the draft amendment here.
  3. Vessel Tonnage Tax Law (Draft) 船舶吨位税法草案: Nov. 7, 2017 – Dec. 6, 2017

All linked filed are PDF documents in Chinese.

Given the short comments period for the draft E-Commerce Law, we expect the NPCSC to deliberate and pass it at its upcoming December session.

To submit comments online, please refer to these instructions. The “Occupations” dropdown list for the draft amendment to the Rural Land Contract Law includes these items, from top to bottom: (1) agriculture, forestry, animal husbandry, or fishery workers (农、林、牧、渔从业人员); (2) employees of scientific research institutions (科研机构工作人员); (3) employees of state organs (国家机关工作人员); and (4) other (其他).

Comments can also be mailed to the NPCSC Legislative Affairs Commission (全国人大常委会法制工作委员会) at the following address:

Chinese: 北京市西城区前门西大街1号 邮编:100805
English: No. 1 West Qianmen Avenue, Xicheng District, Beijing 100805

Please clearly write “[BILL NAME IN CHINESE]征求意见” on the envelope.

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NPCSC to Consider New Criminal Law Amendment, Apply National Anthem Law to SARs & Hear Judicial Reform Reports

The NPC Observer turns one today! Many thanks to our readers, subscribers, and Twitter followers for the amazing past year. By the way, we are now on Facebookbecause. . . why not?

UPDATE (Oct. 30, 2017): The finalized agenda and daily schedule of the session are released. One new item—a draft decision to carry out pilots to reform the state supervision system in an additional 28 provinces*—was added to the agenda just a day after the Communist Party announced that it had made such a decision. We will report on the details of the NPCSC decision either tomorrow when the full NPCSC hears an explanation of it or when the NPCSC passes it on November 4.

*The reform will therefore be carried out in 31 of 32 of China’s provincial-level administrative divisions (excluding Hong Kong and Macau).

Buried in the pre-19th Communist Party Congress propaganda frenzy was a bland official report on the Council of Chairmen’s latest meeting on October 16. The Council decided that the 30th—and third last—session of the 12th NPC Standing Committee (NPCSC) would take place from October 30 to November 4, consistent with our earlier predictions. This post is a (fairly detailed) rundown of the items on the Session’s agenda.

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NPC Standing Committee Schedules Major Legislation for 2017

The 12th NPC Standing Committee (NPCSC) today finally released its much-anticipated legislative and supervisory plans for 2017. Here we will focus on the legislative plan, leaving the supervisory plan for another blog post. According to the 2017 legislative plan, a total of 23 legislative projects are tentatively scheduled (as the plan is subject to change) for the remaining four NPCSC sessions this year, with dozens more listed as preparatory projects. Among them, there is certainly no lack of blockbuster legislation, whether relating to China’s judicial reform, anti-corruption drive, environmental protection, or economic and social development in general.

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