China's Emerging Tax Regime: Local Tax Farming and Central Tax Bureaucracy

45 Pages Posted: 26 Aug 2006

See all articles by Z. Zhu

Z. Zhu

Chinese Academy of Sciences (CAS) - Shenyang National Laboratory for Materials Science

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: December 21, 2005

Abstract

China like other transition economies needs to establish a tax system compatible with a market economy, in particular, an efficient tax administration system with capable tax bureaucrats. The paper singles out the general and China-specific features by which central government attempts to accompany economic transformation via tax farming to tax bureaucratisation in tax administration. Based on empirical study in two provinces this paper shows that without including local government agencies and their budgets, China’s fiscal federalism cannot be analysed and argues that China’s emerging tax system depends on the institutional and organizational design that shapes the interaction between central government, local governments and economic agents.

Keywords: Fiscal Federalism, Tax Bureaucratisation, Tax Farming, Tax Governance

Suggested Citation

Zhu, Z. and Krug, Barbara, China's Emerging Tax Regime: Local Tax Farming and Central Tax Bureaucracy (December 21, 2005). ERIM Report Series Reference No. ERS-2005-088-ORG. Available at SSRN: https://ssrn.com/abstract=902735

Z. Zhu (Contact Author)

Chinese Academy of Sciences (CAS) - Shenyang National Laboratory for Materials Science

52 Sanlihe Rd.
Datun Road, Anwai
Beijing, Xicheng District 100864
China

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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