(Promulgated by the Standing Committee of the National People’s Congress on June 10, 1982)



ISSUE-DATE: 06/10/1982

IMPLEMENT-DATE: 07/01/1982


With a view to bringing into full play the economic leverage of revenue, regulating the profits of certain industrial products as well as the income of different enterprises, and promoting the adjustment and development of the national economy for the sake of stabilizing state revenue, necessary adjustment has, with the approval of the State Council, been made regarding the commercial and industrial tax rates applicable to certain categories of products and with a number of taxable items added to the list.

[Article 1] The tax rates of the following five items shall be reduced:

1. Soap, from 12% to 5%;

2. Rubber-soled shoes with cloth instep, from 18% to 5%;

3. Condensed milk and milk power, from 10% to 5%;

4. Earthenware and pottery, from 12% to 5%;

5. Washing powder, from 12% to 5%.

[Article 2] The tax rates of the following two items shall be raised:

1. Crude oil (for enterprises whose annual output exceeds 1.5 million tons), from 5% to 12%;

2. Tires (pneumatic or otherwise): automobile tires, from 10% to 15%, other tires (pneumatic or otherwise), from 10% to 12%.

[Article 3] The following item shall be added to the taxable list:

The balance which a bank makes from its business income after payment of interest on deposits shall be taxed at the rate of 10%. Credit cooperatives shall not be taxed for the time being.

Tax shall be paid locally by the bank as an accounting unit having its own business income, for example, the branch in a county or the district office in a city. All banks above the county level which directly engage in business shall pay taxes in their respective localities.

[Article 4] The adjustment of tax rates and the extension of taxable items are mainly aimed at regulating the level of profits of certain industrial products and that of the income of different enterprises. They only involve changes between tax and profit, and should in no way cause any adverse changes in the prices of goods. Each district and department concerned should pay attention to the following issues in the implementation of the notification:

1. No districts, departments or enterprises are allowed to take advantage of the tax rate adjustment on certain categories of products to raise prices, leading to price fluctuations and adding undue burden to the customer. Any violation shall be dealt with in accordance with the law.

2. After the adjustment of tax rates, the enterprises which really have difficulties in business operations because of objective factors may, subject to approval by higher authorities, be granted preferential treatment of either tax reduction or tax exemption within the limit of authority specified by the provisions of the revenue control system. Preferential treatment, however, shall not be given to enterprises whose operational difficulties are of their own making or closure, suspension or reorientation of production necessitated by changes of government policy.

3. In case the adjustment of tax rates should affect the income of enterprises which practise the system of retaining part of their profits on condition that they shall be solely responsible for their gains and losses, some adjustment may be made, as prescribed by the relevant provisions, in the ratio of profits to be retained and in the quota for gains and losses.

4. In places where the financial system of separate accounting for income and expenditure as well as graded responsibility is enforced, the basic figure for financial responsibility shall be modified after the tax rates on certain categories of goods have been adjusted and new taxable items added, resulting in the increase or decrease of district revenue income.

The above provisions concerning the adjustment of tax rates and the extension of taxable items will come into force from July 1, 1982.

The adjusting of tax rates and extending of taxable items is an important measure to promote the adjustment of the national economy and the development of production. It is a decisive policy which concerns the interests of certain departments and enterprises. People’s Governments at all levels should strengthen leadership, direct departments concerned to work in close coordination, pay attention to keeping abreast of developments and sum up experiences, so as to get the job well done.