(GF No. (1996)37)
5 September 1996
All provincial, autonomous region and municipal People’s Governments, all State Council ministries and commissions, all directly subordinate organs:
In order to realistically strengthen the construction of a Socialist spiritual civilization, and stimulate the healthy development of cultural undertakings, the State Council has decided to further perfect cultural economic policies, and at the same time as expanding all levels’ financial administration input in cultural undertakings, broaden cultural undertaking financial input channels, and progressively shape fund-raising mechanisms and multi-channel input structures adapted to the requirements of the Socialist market economy.
I, Levying cultural undertaking construction fees
In order to guide and regulate the development of cultural undertakings, from 1 January 1997, a cultural undertaking construction fee will be levied nationwide (where localities already levy this it will not be levied doubly).
(1) All sorts of commercial entertainment venues such as song halls, dance halls, karaoke song and dance halls, music teahouses, golf courts, billiard halls, bowling halls, etc., will pay a cultural undertaking construction fee amounting to 3% of their business income.
Advertising media work units such as radio stations, television stations, newspapers and periodicals, etc., as well as outdoor advertising business work units, will pay a cultural undertaking construction fee amounting to 3% of their business income.
(2) Cultural undertaking construction fees are collected together with entertainment business or advertising business taxes by local taxation organs. Cultural undertaking construction fees paid by Central and State organs’ subordinate work units, are completely transferred to the central treasury after collection by the local taxation organs. Locally paid cultural undertaking construction fees are to be completely transferred to the provincial-level treasury.
(3) Cultural undertaking construction fees are brought into financial budget management, and are used by central and provincial governments respectively to establish special funds to be used for cultural undertaking construction. Concrete management and use rules for cultural undertaking construction fees will be formulated by the financial departments together with relevant controlling departments.
II, Encouraging donations to cultural undertakings
In order to encourage social forces to financially aid cultural undertakings, the part of taxpayers’ contributions to the following cultural undertakings through administrative cultural management departments or non-commercial public interest-type organizations established with approval, that falls within 3% of annual taxable income, after examination and verification by the controlling tax organ, may be deducted from the taxable income value:
(1) Contributions to State focus symphony orchestras, ballet troupes, opera troupes and Beijing opera troupes and other ethnic artistic performance troupes.
(2) Contributions to public interest-type libraries, museums, science and technology halls, art galleries, revolutionary history memorial halls, etc.
(3) Contributions on local focus cultural heritage protection work units.
III, Continuing to implement preferential taxation policies
Following economic development and the growth of fiscal income, progressively adding financial input into cultural undertakings, and continuing to implement preferential taxation policies.
(1) During the “9th Five-Year Plan” period, the provisions on value-added tax for seven publications categories and county-level and lower Xinhua bookstore and rural supply collectives selling publications in the Ministry of Finance and General Administration of Taxation “Regulations Concerning Continuing to Implement Preferential Taxation Policies to Propaganda and Culture Work Units) (No. (94)CSZ089) will continue to be implemented according to the method of levying first and returning afterwards; the income through film copy selling of film production studios established with State Council permission, will continue to be exempt from value-added tax; central and provincial finance administrations continue to list the real amount of income tax paid by propaganda and cultural work units the year before into the appropriations budget, and establish special propaganda and culture development funds; central and provincial-level taxation authorities must continue to arrange for special funding in their budget, and bring it into special funding for propaganda and culture development.
Where preferential taxation policies cease to be implemented because of taxation system adjustment, all levels’ financial departments must respond by resolving funding problems engendered by this in propaganda and culture work units through budgetary methods.
(2) Appropriately expanding the “Ten-thousand Mile Border Culture Long Corridor” subsidy expenses. Arranging for a certain amount of ethnic undertaking fees and border construction fees to support border regions and ethnic regions to develop cultural undertakings. Relevant local policies shall also progressively increase input into border region and ethnic region cultural undertakings.
IV, Establishing and perfecting special fund systems
In order to stimulate propaganda and cultural undertaking development, strengthen control capacity, guarantee focus needs and standardize funding management, central and provincial levels must establish and complete relevant special funding systems.
Special funding sources are funds budgeted by financial administration and non-budget funding such as fees collected with the approval of relevant State provisions. Financial departments must perform special fund budgeting arrangements, and relevant departments must strictly levy non-budget funding according to regulations. At present, it is necessary to focus on perfecting the “Special Propaganda and Culture Development Fund”, the “special preferential drama (programme) creation and performance fund”, the “Special State Film Undertaking Development Fund” and the “Special Publishing Development Fund” systems.
Special funds are financial administration funds, and it is necessary to complete systems and strengthen management, according to the requirements of the relevant financial administration regulation, and guarantee that special funds are put to special use, and supervision and inspection from financial and auditing departments are accepted.