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An international survey that gives China's tax system low marks for efficiency has stirred up a debate among local officials and experts.

 

China reportedly ranks eighth among countries with the highest tax burdens, a survey of the business environments in 175 economies concluded. The survey was jointly conducted by the World Bank and the consulting firm PriceWaterhouseCoopers.

 

It measured indicators like types of taxes levied, time needed for paying them and tax rates. It found that on average, a company operating in China spends 872 hours per year dealing with tax matters. The average for all the economies surveyed was 332 hours.

 

However, an official at the State Administration of Taxation was quoted by China Business Week magazine as saying that the survey's data was incomplete and its methodology questionable.

 

Still, some experts agreed that taxation authorities have room to streamline the tax system to reduce the time and energy enterprises have to spend.

 

Zhou Tianyong, an economist at the Central Party School, said the fees that some government departments collect could be considered de facto taxes.

 

Zhou said some of the fees should be cancelled, while those deemed absolutely necessary should be converted into taxes that are payable only to tax bureaus.

 

Zhang Bin, an economist at the Chinese Academy of Social Sciences' Institute of Finance and Trade, said some of the taxes could be combined to reduce the number of the taxes that enterprises pay.

 

Steps should also be taken to simplify tax-paying procedures, Zhang said.

 

(China Daily January 23, 2007)