Tax
China Considers Savings Tax Cut to Cool Stock Market

Chinese officials said the PRC government may scrap the 20 per cent tax on bank deposit interest as a means of cooling the country's overheated stock markets. The CSI 300 Index, which doubled in the past six months, has tumbled 16 per cent from its May 29 peak after the government tripled the tax on share trades to 0.3 per cent. "Scrapping the interest tax may help increase bank saving and shift money back from the stock market," said Ni Hongri, a tax researcher at the State Council Development and Research Center in Beijing. "Stamp-duty increases will remain the government's first option, while interest-tax reform may be an option that follows.” The benchmark stock index plunged 7.7 per cent on Monday, the biggest points slide on record, after the government's main business newspaper signaled that officials would not try to halt a slump that has wiped out more than $350 billion of market value in four days. The speed at which stock prices soared was "extremely unusual" and highlighted "structural bubbles" in the market, said an editorial in the state-owned China Securities Journal.