The principle of legality in taxation should be honored, said a signed article in Beijing News. An excerpt follows:

According to a circular released last Wednesday by the State Administration of Taxation, earnings from auctions of private property - excluding manuscripts and their copies - will be taxed at a rate of 20 percent from tomorrow.

A number of new taxable items have emerged in recent years. Many new items and the taxation rates are disputed because basic legality in terms of taxation is yet to be established in China.

The principle of legality in taxation means the rights and obligations of the tax collectors and payers should be decided by law, taxable items and tax rates should only be decided through legislation, and there should be no tax or tax reduction without legal grounds. Most countries have so far honored this principle in their constitutions.

Such a principle is required because taxation concerns citizens' property rights. A cautious attitude is needed. If the government was able to decide taxable items and rates without getting approval from the legislature, there could be too many items and too heavy rates to burden the public.

Therefore it is necessary to stick to the principle of legality in taxation when introducing a new taxable item or increasing the tax rate. But the fact that taxation organs have just issued a circular to levy taxes or adjust tax rates just shows that they are ignoring this principle.

(China Daily April 30, 2007)