1931, July 15 Chapter I General Provisions Article 1 A unified progressive tax shall be established, and all land taxes, poll taxes, miscellaneous levies, and other oppressive imposts imposed by the Nationalist warlord governments shall be abolished. Article 2 Types of Taxation: Taxes shall be divided into three categories—commercial tax, agricultural tax, and industrial tax.

Chapter II Commercial Tax Article 3 Tax Rates: For the time being, the commercial capital tax shall be graded into fourteen brackets ranging from RMB 101 to RMB 500,000. Income tax shall be levied on the taxable profits of such capital according to the respective bracket rates (that is, only the total profit income shall be taxed, not the capital itself). The tax rate for capital exceeding RMB 500,000 shall be determined separately. The following table sets forth the rates: Commercial Tax Seven Brackets Capital Range Tax Rate First Bracket RMB 101–200 6% Second Bracket RMB 201–400 7% Third Bracket RMB 400–1,700 8% Fourth Bracket RMB 1,700–11,000 8% Fifth Bracket RMB 10,001–15,000 10% Sixth Bracket RMB 15,001–130,000 11% Seventh Bracket RMB 300,001–150,000 12% Eighth Bracket RMB 500,001–100,000 13% Ninth Bracket RMB 100,001–200,000 15% Tenth Bracket RMB 200,001–300,000 17% Eleventh Bracket RMB 300,001–500,000 19% Twelfth Bracket RMB 500,001–800,000 21% Thirteenth Bracket RMB 800,001–1,000,000 23% Fourteenth Bracket RMB 1,000,001–500,000 25% Article 4 Method of Collection: Based on the business license issued by the government’s financial authorities to each shop, the tax rate shall be determined according to the amount of capital, and the corresponding business tax shall then be collected. Article 5 Collection Period: Collection shall take place once a month; seasonal businesses shall also be taxed at each relevant period. Article 6 Exemption Measures: (a) Consumer cooperatives organized in accordance with the government-issued cooperative regulations and duly registered with the county government may, upon report to the provincial government by the county authority, be granted tax exemption. (b) Peddlers with capital below RMB 100 and farmers who directly sell their surplus produce shall be wholly exempt from commercial tax. (c) Merchants whose capital does not exceed RMB 100 shall be entirely exempt. (d) Merchants who suffer disaster or accidental damage, and whose claims are verified by the government, may be granted tax exemption. (e) The government may, by order, at any time declare certain essential daily necessities and military supplies as exempt from tax.

Chapter III Agricultural Tax (Note) At present, rural production and commodity values are extremely complex, making it impossible to establish a uniform taxation system. It is therefore only feasible to lay down general principles for the collection of agricultural tax; each province may, in light of local conditions, formulate appropriate agricultural tax regulations and submit them to the central government for approval and implementation. Article 7 After peasants have been allocated land, the annual per capita yield shall be determined by averaging the principal harvest of the entire household against its living expenses. On this basis, the minimum taxable amount per person and the progressive tax rates shall be set. However, wealthy farmers shall have their yields and tax liabilities calculated on a labor basis rather than a per capita basis. Article 8 Only taxes on principal crops (grains and cereals) shall be levied; secondary products shall remain untaxed. Nevertheless, those who harvest grains and cereals only once a year shall be taxed once. Article 9 Tea plantations, cotton and hemp fields, and orchards, when classified as paddy or wheat fields and thus regarded as producing principal crops, shall likewise be subject to taxation. Article 10 Members of Red Army families (limited to parents, spouses, and non-working siblings) shall be exempt from tax pursuant to the preferential treatment regulations for Red Army personnel. Article 11 Tenant farmers and hired laborers who have been allocated land shall both be exempt from tax, along with their spouses. Article 12 Poor farmers whose income has reached the threshold for taxation but who still cannot sustain their households may, at the discretion of the village soviet, receive individual reductions or complete exemptions. Article 13 Taxation of former rich farmers shall be particularly intensified. Article 14 Areas affected by droughts, floods, or devastation by White Bandit forces shall be granted full or partial tax exemptions or reductions, depending on the severity of the disaster. Article 15 Increases in agricultural income resulting from improved seeds and better cultivation methods shall be exempt from tax. Article 16 Newly reclaimed wasteland and the agricultural products harvested therefrom shall be exempt from tax for three years; rich farmers, depending on their harvest, may receive one year of tax reduction or exemption. Article 17 The methods and timing of agricultural tax collection shall be announced by the Central Ministry of Finance. However, other isolated soviet areas may, based on local conditions, make their own announcements through their respective highest governing bodies. During collection, the amount of tax payable by each household shall be assessed and collected in accordance with the prescribed rates. Article 18 Agricultural tax shall be paid exclusively in cash using the official currency of the Chinese Soviet Republic; no other miscellaneous currencies will be accepted.

Chapter IV Industrial Tax Article 19 Production cooperatives that have been approved and filed with the county government may, upon report to the provincial government by the county authority, be granted tax exemption. Article 20 In order to promote industrial development within the soviet areas at present, the export tax on industrial goods shall be temporarily waived. Article 21 Industrial income tax shall be levied on profits according to the size of the capital, with tax rates to be specified separately but generally lighter than those applicable to commercial enterprises.

Chapter V Supplementary Provisions Article 22 These tax regulations shall enter into force upon their promulgation.

Chairman of the Central Executive Committee Mao Zedong Vice Chairmen Xiang Ying and Zhang Guotao July 15, 1931