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No tax on bond gains for firms, individuals
By Winny Wang |
September 23, 2011, Friday
|
Print Edition
Print Edition
INDIVIDUALS and corporations will be exempted from paying tax on gains in local government bonds, China's finance ministry announced yesterday.
They need not pay interest tax on local government bonds that were issued from 2009 to 2011, the Ministry of Finance said on its website yesterday.
In 2009, the ministry allowed local governments to issue bonds to boost domestic demand and increase investments in public facilities amid the global financial crisis, but they were barred from selling bonds directly.
The ministry issued 141.6 billion yuan (US$22.2 billion) of bonds on behalf of local governments from January 1 to August 31, compared with 200 billion yuan each in 2009 and 2010.
Previous media reports said a pilot program allowing local governments to sell bonds directly in Shanghai as well as the provinces of Guangdong, Zhejiang and Shandong is being studied.
"The program will enhance local governments' discipline and transparency in managing their debts," Moody's analysts said in a report.
"The program will alleviate liquidity pressure by providing them with alternative sources of funding, which have relied heavily on bank loans to the so-called 'local government financing vehicles,'" the report said.
They need not pay interest tax on local government bonds that were issued from 2009 to 2011, the Ministry of Finance said on its website yesterday.
In 2009, the ministry allowed local governments to issue bonds to boost domestic demand and increase investments in public facilities amid the global financial crisis, but they were barred from selling bonds directly.
The ministry issued 141.6 billion yuan (US$22.2 billion) of bonds on behalf of local governments from January 1 to August 31, compared with 200 billion yuan each in 2009 and 2010.
Previous media reports said a pilot program allowing local governments to sell bonds directly in Shanghai as well as the provinces of Guangdong, Zhejiang and Shandong is being studied.
"The program will enhance local governments' discipline and transparency in managing their debts," Moody's analysts said in a report.
"The program will alleviate liquidity pressure by providing them with alternative sources of funding, which have relied heavily on bank loans to the so-called 'local government financing vehicles,'" the report said.
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