Taxation should be codified in laws

A property tax pilot program launched in Shanghai and Chongqing three years ago has done nothing to rein in rising property prices, other than perhaps to cast a shadow over the confidence of real estate investors in the two cities.

The government has made progress in gearing up for tax reform since the release of the communiqué for the Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee late last year and the blueprint for further tax reform in June. However, to realize true reform, the country first needs to pass tax laws.

China first decided to enact tax laws in 1982. However, because it was still in the initial stage of building a socialist country at that time, the National People's Congress, China's top legislature, authorized the State Council in 1984 and 1985 to handle the issue. Three decades later, the authorization remains in effect. As a result, nearly 80 percent of today's tax policies were enacted arbitrarily through provisional administrative regulations, rather than laws.

The government has vowed to complete tax reform by 2016. But the reform's goal should be a systematic change. Tax reform is supposed to be an institutional innovation, not just a can to be kicked down the road.