Chapter 04: Market Fees and Turnover Taxes, Page 3

Turnover Taxes
These taxes are levied by the government on wholesalers and resellers who sell at the free markets:

At the Retail Free Markets
The municipal Tax Bureau charges resellers a "sales tax" or turnover tax based on the assumed sales value of the produce they display for sale. These taxes are levied on-the-spot, simply based on the tax collector's estimate of what the vendor is likely to earn if he sells most of the produce by the end of the market time. This arbitrary system results in a lot of haggling between the vendors and the tax collectors.

Farmers in Shanghai are not required to pay turnover taxes. Beginning in 1996, farmers in Beijing are required by pay such taxes, but the taxes are nominal and are included in the base market fee.

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Wearing matching West Point hats, these tax collectors do an effective job!

The tax rate and method of calculating the tax varies quite a bit from city to city:

Typical Monthly Turnover Taxes in 1997
(converted into US$ from RMB at $0.12 = 1 RMB)

	All-day markets	Morning markets
Beijing	Farmers: US$ 14 Resellers: 3% of sales	Farmers: in Market Fee Resellers: 3% of sales
Shanghai	Farmers: 0 Resellers: US$ 36	Farmers: 0 Resellers: US$ 7-10