AS CHINA’S ECONOMIC DEVELOPMENT BECOMES LESS RELIANT ON CENTRAL PLANNING, PRIVATE COMPANIES INCREASINGLY ARE ABLE TO RETAIN THEIR PROFITS.

WHILE THESE REFORMS ARE HERALDED AS POSITIVE STEPS TOWARDS MODERNIZATION AND THE DEVELOPMENT OF FREE MARKETS, THEY DO CHALLENGE THE CHINESE GOVERNMENT TO COME UP WITH NEW WAYS OF RAISING REVENUE.

THE MOST OBVIOUS REMEDY FOR THE GOVERMENT TO MAKE UP THE LOSS OF PROFITS FROM PRIVATIZED FIRMS IS FOR IT TO DEVELOP A NEW TAX SYSTEM. TWENTY DELEGATES FROM THE PEOPLE’S REPUBLIC OF CHINA’S STATE TAX BUREAU ATTENDED A THREE WEEK COURSE AT GEORGIA STATE UNIVERSITY IN ATLANTA EARLIER THIS MONTH TO STUDY THE U.S. TAX SYSTEM KEEPING THIS OBJECTIVE IN MIND.

WE WANTED TO STUDY THE FEDERAL AND LOCAL TAX SYSTEMS, SAID DONG ZHILIN, DEPUTY DIRECTOR OF THE TAX BUREAU’S PERSONNEL EDUCATION ADMINISTRATION IN BEIJING.  WE HAVE TO DECIDE IN CHINA WHAT KIND OF TAX SHOULD BE COLLECTED AT THE NATIONAL LEVEL AND WHAT TYPE OF TAX TO COLLECT AT THE LOCAL LEVEL.

ASIDE FROM THEIR ACADEMIC SCHEDULE WHICH INCLUDED COURSES ON FISCAL ADMINISTRATION, INDIRECT TAXES, AND INCOME TAXES, THE DELEGATION VISITED THE IRS SERVICE CENTER IN ATLANTA, THE ATLANTA/FULTON COUNTY TAX ASSESSOR’S OFFICE AND THE TAX OFFICES OF OCONEE COUNTY.

MR. ZHILIN SAID THAT THE DELEGATION WAS CURIOUS TO LEARN MORE ABOUT THE U.S. SYSTEM’S RELIANCE ON VOLUNTARY COMPLIANCE AND THE PROCEDURES FOLLOWED TO RESOLVE DISPUTED CLAIMS.  INDIVIDUAL INCOME TAXES NOW PLAY A VERY TRIVIAL ROLE IN CHINA, HE SAID, WITHOUT INDICATING WHETHER OR NOT HE THOUGHT THAT THE CHINESE WILL BE FILLING OUT W2 OR 1040 FORMS IN THE FUTURE.  HE DID SAY THAT HE THOUGHT COMPUTERS PLAYED AN IMPORTANT ROLE IN ASSURING THAT THE VOLUNTARY SYSTEM WORKED, AND INDICATED THAT OPPORTUNITIES FOR TAX RELATED U.S. HARDWARE AND SOFTWARE SALES MIGHT EVOLVE.

DR. ROY BAHL, DIRECTOR OF GEORGIA STATE’S POLICY RESEARCH CENTER, HAS DEVELOPED TIES WITH CHINA’S STATE TAX BUREAU, AND INVITED THE DELEGATION TO STUDY AT THE CENTER.  HE ALSO HAS ENCOURAGED SEVERAL CHINESE STUDENTS TO ENROLL IN THE UNIVERSITY’S PHD. PROGRAMS.

FOR MORE INFORMATION, DR. BAHL MAY BE REACHED (404) 651-2605.  MR. ZHILIN MAY BE REACHED BY MAIL AT NO. 68 ZAOLINQIANJIE, XUANWU DISTRICT, BEIJING, POSTCODE: 100053, OR CALL 3263366-2294.