The ongoing property tax pilot project in Chongqing and Shanghai will eventually expand to other cities, according to a finance ministry official in China.
Although the government has decided on the overall direction of the property tax roll-out, Jia Kang, Director of the Ministry of Finance’s Fiscal Science Research Centre, believes the entire country is not yet ready for the implementation of the property tax.
In addition, Jia noted that other senior finance ministry officials have shown keen interest in the results of the project.
By the end of the year, Shanghai and Chongqing officials will evaluate the programme’s impact. He also said that the ministry is yet to decide which cities will be included in the next phase of the roll-out.
On the criticism that the pilot projects’ revenue is too small to create significant impact on local government finances, Jia explained that the failure or success of a project should not be based solely on the revenue raised, particularly during its first year.
Rather, it should be gauged based on how the tax affects the property market, as well as the overall economic structure and society.
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