The key to the further reform on rural tax and fee systems and fundamental alleviation of farmers' burdens lies on cutting back administrative personnel at village and township level, said Chinese Premier Wen Jiabao in Beijing Tuesday (Jul 7) at a meeting on rural tax reform.

China's reform on rural tax and fee systems since four years ago has reduced farmers' burdens by large margins, Wen said, noting the next step is to cancel all sorts of taxes and fees specially targeted at farmers and establish efficient grassroots administrative mechanisms.

As the income gap between Chinese urban and rural people has been widening since 1990s, the central government began to pay more and more attention to the problems pertaining to agriculture, farmers and rural areas.

"Solving problems facing agriculture, rural areas and farmers becomes a top priority in all government work this year," said Wen early this year.

In 2000, China first launched its experimental reform on rural tax and fee systems in eastern Anhui Province, in a bid to standardize the tax burdens on farmers and eliminate the growing administrative and arbitrary fees charged on farmers.

The number of provincial areas embracing the reform had grown to 20 by 2002, where 620 million farmers, or three quarters of thecountry's total, benefited from the reform.

The outcome was that the financial burden on farmers was cut by at least 30 percent. Before the reform, Chinese farmers used to pay 120 billion yuan (about 14 billion US dollars) in taxes and fees to local and central governments each year, or 150 yuan per farmer, a hefty burden by rural Chinese standards.

The Chinese government decided in late 2003 to abolish, exempt or lower 15 charges on the country's 900 million farmers in a bid to reduce their excessive financial burdens.

The government has announced that all taxes on special agricultural products will be repealed except for tobacco, thus reducing the financial burden on farmers by 4.8 billion yuan annually.

Beginning this year, the agricultural tax rate will be reduced by more than one percentage point per year on average, and agricultural taxes will be rescinded in five years, according to the governmental plan.

"We should further reform administrative organizations at village and township levels, cut back staff, change grassroots governmental functions, increase investment in rural social causes and improve supervisory mechanism over alleviation of farmers' burdens," the premier said at the meeting.

The deepening of rural tax reform is related to the development and stability of the whole rural reforms, he said, calling on all localities and departments to fully realize the importance and difficulty of this reform.

Editor: Donald