Question: What does a kangaroo fart have to do with taxation in China and India?
Answer #1: Read on, my friends! Now that I’ve got you interested enough to have read past the title, you’ll have to go a bit further to find the answer. You are now reading this at the start of the Lunar New Year. After a lull in the world’s commerce during the western, December holiday season, there were a couple of weeks of multi-national vim, vigor and vitality of work……and then the mass exodus began in China. Now it’s China’s time for nothing eventful to take place – at least not until about the third week of February.
This is the only time of year for many in the vast pool of migrant labor throughout China to return home for the holidays which, effectively, mean a month off from labor intensive, low wage factory production while families joyously partake in Thanksgiving, Christmas and (western calendar) New Years all rolled into one holiday package. To the non-Chinese, the Lunar New Year is an ‘aquired’ taste…what more can I say: I’ve acquired it!
While it is the slack season in the PRC, it is a good time of year to work in India: the monsoon season is over, the heat of summer is not here, Devali is over… In India, if you call a business, you’ll get an answer (assuming that the phone lines are working). In China, the phone will ring…and ring…and ring as the business is closed for the holidays. Once business re-opens after the holidays, though, it is tax season in calendar tax year China. While we have yet to see the ‘bite’ of the State Administration regarding the individual income tax return that must be filed by anyone earning over RMB 120,000 in wages during 2007. as well as eleven other income categories. That tax return is due by 31 March. Additionally, all business entities must file their annual income tax returns, accompanied by certified audit, by 30 April. Thus getting ready to file a tax return, whether business or individual, is a matter of concern that’ll simply have to be faced after the holidays. India, on the other hand, follows the British system of fiscal year, not mandatory calendar year and of concern, now, tax-wise, is the annual budget report by the Finance Ministry, which sets tax change goals for the next year.
China and India trade…China and India tax…so much of the future lies in the fiscal relations between these two countries which comprise approximately 45 percent of the world’s population.Sonia Gandhi, the non-Indian widow of an Indian dynasty; a revered, queen-like figure from a country without official royalty, spoke before Qingua University of Beijing at the end of October 2007. Her speech was picked up by the press of both countries and The Hindu , one of the four India English-language newspapers whose websites I look at on a regular basis, publishes a link to this speech on its home page. Here’s my executive summary of Mrs. Gandhi’s very detailed, six-page speech: The China-India relationship is in some ways unique in history. There is perhaps no other example of two countries, indeed two ancient, many-splendoured civilizations co-existing side-by-side, both in geography and in the realm of ideas, in peace and harmony, almost uninterrupted for millennia. Prime Minister Wen Jiabao put it succinctly and if I may (say) so, with the great empirical precision that China is noted for, and I quote… “during the past 2,200 years, for about 99 percent of the time we have devoted to friendly cooperation between our two countries.” Wow! That is profound. Where else in this world can one find two neighboring countries who have only been at odds with one another for such a small percentage of the time?
Following are bits and pieces from that speech which I think are relevant insofar as current trade and taxation are concerned: