An Agricultural tax is levied on those who are engaged in the agricultural industry. The levy, which had a 2,600-year history in China, was scrapped on January 1, 2006. Its end marked a milestone for national farmers who receive much lower government subsidies compared with Western countries.
Tradition: The agricultural tax, which started in Spring and Autumn Period (770-476 BC), was transferred from feudalist to the socialist society. On June 3, 1958 the country carried out a regulation on agricultural tax that continued it until the end of 2005. From 1949 to 2000, farmers had handed their products, which totaled 700 billion kilograms, to the country, and the agricultural tax was always a pillar of revenue for the country.
In 2004, the country started to carry out preferential policies by reducing part of the tax on its 900-million farmers. According to Wang Daoshu, a senior official from the State Administration of Taxation, the exemption of the tax enhances the competitiveness of domestic agricultural products in the global market and narrows the widening disparity of the income among urban and rural residents.