A Historical Account of Taxes on Goods and Services in the Transition to Post-Socialist China

Peter Harris and Dominic de Cogan (eds.), Studies in the History of Tax Law, Vol 7

The Chinese University of Hong Kong Faculty of Law Research Paper No. 2015-04

Posted: 19 Aug 2015

See all articles by Yan Xu

Yan Xu

The Chinese University of Hong Kong (CUHK) - Faculty of Law

Date Written: September 2015

Abstract

The taxes on goods and services, subject to a very brief interruption, have been separately applied since their inception in early times in modern China. Until now, the Value Added Tax (VAT) is still an incomplete tax as the tax on goods is separate from the tax on services according to the basic legislation, although the two taxes are moving towards an integrated system. The adoption of bifurcated taxes on goods and services has caused a number of problems for the economy and businesses. The question is why the government did not choose a normal VAT system in the first instance if the separation is inefficient. This chapter addresses the question by way of an examination of the historical development of the system of taxes on goods and services in modern China and argues that the design of the system was historically constrained by a number of factors including economic foundations, the level of tax administration and inter-governmental fiscal relations.

Suggested Citation

Xu, Yan, A Historical Account of Taxes on Goods and Services in the Transition to Post-Socialist China (September 2015). Peter Harris and Dominic de Cogan (eds.), Studies in the History of Tax Law, Vol 7; The Chinese University of Hong Kong Faculty of Law Research Paper No. 2015-04. Available at SSRN: https://ssrn.com/abstract=2646381

Yan Xu (Contact Author)

The Chinese University of Hong Kong (CUHK) - Faculty of Law ( email )

6/F, Lee Shau Kee Building
Shatin, New Territories
Kowloon, Sha Tin
Hong Kong

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