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China To Raise Tax Rates Upon WTO Entry
by Maureen Sirhal
China will move to increase tax rates for foreign firms and harmonize them with tax rates on local enterprises when the nation enters the World Trade Organization, Chinese officials said Monday.
China Daily reported that the new policy would abandon China's former practice of giving tax breaks to foreign investors, a policy that has partly driven the country's economic growth over the last two decades. The timing of the new tax system will depend on when China joins the WTO.
Presently, Chinese companies pay as much as 33 percent in taxes, while foreign-owned enterprises often pay as little as 12 percent, a factor that has made China a huge target for foreign investors. Foreign investment accounted for more than $40 billion last year.
Country officials argue that local companies often have benefited from high tariff rates and import fees paid by foreign companies, measures that will be removed once China ascends to the WTO. Taxes paid by foreigners rose 41 percent, to $28 billion, last year, comprising 18.3 percent of the Chinese government's total tax revenues, state media has reported.
Meanwhile, the United States and China reached consensus over the weekend on remaining economic issues related to China's WTO entry, the Office of the U.S. Trade Representative (USTR) said Saturday. USTR Robert Zoellick and Chinese Trade Minster Shi Guangsheng reached agreements on agriculture, retail business, insurance and trading rights, among other issues.
A U.S. trade official had said China and the U.S. originally were set to focus negotiations on agricultural issues. But out of a desire to push the process for WTO entry forward, Chinese officials also wanted to discuss other outstanding trade issues. The official added that there is a "decent likelihood" for China to gain WTO entry by year's end.
Where Art Thou .au?
Australia's government may face a fight with the reclusive programmer responsible for plugging the country's top-level domain-name suffix, .au, into the global Internet, the Sydney Morning Herald reported this week.
Melbourne University professor Robert Elz is refusing to relinquish his authority over the .au domain to the regulatory body chosen to be its new administrator. The National Office of the Information Economy (NOIE) has asked Elz several times to relinquish his control over the computer system that connects .au to the Internet, but so far, he has failed to respond.
NOIE has taken its case to the Internet Corporation for Assigned Names and Numbers (ICANN), the global Internet governing body, requesting that ICANN formally acknowledge it as the administrator of .au.
Dreaming Of The High-Speed Net
Canadian taxpayers may be looking at a hefty price tag for high-speed Internet service. A private-sector task force likely will tell the federal government next week that nationwide access to broadband Internet connections by 2004 will run at least $4 billion.
Acting on a campaign promise of wiring Canada to high-speed Internet services, Ministry of Industry Minister Brian Tobin assembled a 35-member task force of high-tech CEOs and technology gurus to develop a plan for the government to meet its commitment by 2004. In a draft report, the task force found that private-sector firms probably do not find it profitable to provide services to remote parts of the country, so taxpayers will have to bear the costs.
The task force also will recommend that Ottawa move quickly to review foreign-ownership restrictions in the telecommunications, cable and satellite industries.
High-Tech Identification In China
China intends to issue new high-tech identification cards to its 1.26 billion citizens, an official newspaper said on Tuesday. Embedded with microchips to store personal data, the new cards would replace the existing system that has long been a target of counterfeiters, the state newspaper China Daily reported.
A few cities likely will test the system this year, and they may be issued first to college students. Implementation of the new program could take up to five years and would contain information such as an ID number and the holder's photograph, name and birth date.
U.S., Indian Groups Meet
Intellectual property will be a key discussion topic in meetings scheduled next week in Washington between U.S. and Indian business leaders and a delegation of Indian government officials including Information and Broadcasting Minister Sushma Swaraj.
As part of its discussions on the new trade agenda, representatives from Indian firms will answer the question, "Is there 'emerging consensus' on intellectual property concerns?" Several Indian industries have begun expressing concern over rampant piracy of its products. The Times of India reported, for example, that the country's filmmakers are increasingly frustrated about the availability of their products on the U.S. market before they are officially released.
The two-day summit also will address issues of e-commerce taxation and regulations, as well as strategies for new trade development. Key U.S. officials also will attend. They will include Peter Allgeier, a USTR deputy secretary, and Alan Larson, the State Department's undersecretary for economics.
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