China rural tax reforms risk hurting education/healthcare: think-tank

SHANGHAI (AFX-ASIA) - China's reform of rural fees and taxes risks causing a deterioration in education, healthcare and other state services in rural areas, State Council Development Research Centre vice-director Chen Xiwen said, according to the China Economic Times.	    According to the report, Chen said it is very important to reduce the tax burden on farmers and raise rural incomes, and failure to do this will cause complicated social problems.	    However, serious consideration must be given to the question of how governments at county and township level will be able to maintain normal operations after their fiscal revenue has been cut.	    The tax reforms should be carried out alongside reforms of the government structure in rural areas, but this will be very difficult, he said.	    Chen said the central government has already indicated that it plans to cancel some township governments and cut staff in others.	    However, of the 12.85 mln individuals on the payrolls of the 45,000 township governments, only 1.4 mln work in administrative and party institutions, while 7 mln of the 8 mln working in non-administrative roles are teachers.	    A further 2.8 mln of those on township government payrolls are drawing retirement pensions.	    Cutting the number of rural government employees would mean laying off teachers, but the government is also encouraging the use of education and science to help develop rural areas, and it will be difficult to coordinate these two aims, he said.	    He noted that rural education costs are high, with one year of education for a primary school pupil costing more than 1,000 yuan, and one year for a middle school student costing more than 1,500 yuan.	    It will be very difficult for farmers themselves to pay these costs.	    After reducing rural tax burdens, it will also be difficult to develop rural healthcare, as well as cultural and leisure services, he said.	    He said he is concerned that even if the rural tax reforms reduce rural burdens, rural individuals will pay an even greater price if the tax changes cause social development in rural areas to slow.	    He added that the tax reforms already implemented experimentally in Anhui province have reduced each farmer's annual tax burden by 31 pct, or about 30 yuan.

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