chapter  12
18 Pages


ByM. W. L. Chan, Ray G. Harris, Wendy Rotenberg

The reformed economic system in China must collect-from increasingly autonomous enterprises and individuals-sufficient tax revenue to provide public goods and services and to ensure an equitable distribution of income. Modern tax assessment and collection are based on monetary measures of income, value-added, and capital gains. China's new tax system requires accurate and verifiable accounts of these values. The accounting system is the foundation of such measures and reports. Accounting provides the objective basis for economic communication within and between decentralized enterprise, and between enterprise and the tax authorities. Without sound accounting procedures, an effective enterprise tax scheme in a market economy cannot be implemented.