State media reported China's two-tier corporate tax system for domestic and foreign firms will disappear in 2006, raising taxes dramatically for foreign companies. Domestic companies now pay 33% and foreign firms 15%. The unified rate would likely be in the 25-30% range, according to a tax researcher at the Chinese Academy of Social Sciences. Value-added taxes (VAT) could also be in for changes about the same time; one change mooted would remove the current 17% VAT from equipment and machinery purchases.
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