Rural Tax and Fee Reform

A reform in rural areas to ease the financial burden on farmers.

In 2000, a pilot program was started in Anhui province under which the agricultural tax rate was cut, other agriculture-related taxes and fees were either written off or merged. The central government subsidized local governments through transfer payments to balance their reduced revenue.

The pilot program was soon extended to other regions and the agricultural tax was totally done away with in 2006 throughout the country, marking the completion of this reform. Now farmers do not pay any tax except those growing tobacco.