James Mirrlees: China should raise taxes
(China Daily)
Updated: 2006-07-06 14:35 The first rate should also be raised, Mirrlees said.
He said that if China decided to introduce a tax on inheritance, the minimum
rate should be high.
"You should not expect big revenue from the (inheritance) tax because very
few people pay it," Mirrlees said.
In addition, this tax is very easy to avoid. For example, tax collectors
should keep good records, particularly where substantial gifts are given to
children or relatives as this could be a way to avoid paying the tax.
On China's preferential tax rate for foreign investors, Mirrlees said it
makes sense to think of foreign companies' willingness to come to China.
However, the dual-track system for corporate income tax has to be changed.
"It is better to treat domestic and foreign companies equally," he said.
Mirrlees said China needs to know the general global trends in corporate
income tax.
From the government's point of view, corporate income tax is a cheap and
effective way of raising revenue.
But the rates are believed to be too high in many wealthier countries.
In Britain, one-third of tax goes to welfare for the poor and the unemployed
an enormously high proportion.
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