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Property tax requires cautious approach

By Yang Zhiyong | China Daily | Updated: 2016-08-16 07:53

Media reports quote the government as saying that levying property tax is now part of its agenda, sparking public concern. The problem is, if property tax is levied without full preparation, it will not achieve the expected goal of increasing revenue. Instead, it could undermine the government's credibility and seriously impede the modernization process of national governance.

Strictly speaking, property tax should be levied on all housing units based on evaluated prices. So the pilot property tax project in Shanghai and Chongqing is not property tax in this sense, because it exempts one or two houses of one household from the tax. And since every housing unit enjoys at least some sort of public service, not levying property tax on some of them would be unfair to the others.

Besides, the revenue from property tax will be limited without an extensive tax base, and thus cannot finance local public services, which is the basic purpose of levying direct tax. Besides, going by the existing situation, individual capacity of payment may influence the levying of property tax.

Property tax requires cautious approach

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