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"...the first tasks set for the provincial administrations were those of tax collection and bond sales to the people, not land reform ¹. These exactions (the bond sales were forced ones) caused a certain amount of unrest, even riots, and were followed by a period of economic stagnation, with some shops closing and others refusing to accept the new paper currency of the regime.² The only arm of the new regime in evidence in most areas for some time was the PLA, and it was under its shield that taxes were collected. " Fig. 40.1 Tax Revenue 1950-1954

Fig. 40.2 Tax Revenue 1950-1954 in %

Fig. 40.3 Major features of agricultural taxes (1953)

"In areas such as Manchuria where land reform had already been completed, grain taxes went up to support a national mobilization effort. Until the end of the war in 1953, grain taxes in Manchuria were as high as fifteen-twenty percent of total crop yield depending on the area and local conditions.²⁰⁸" In 1952 all local surtaxes in the agricultural tax system are abolished.

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See article 37 04-06-1949 Liu Shaoqi "New China's fiscal and economic policies"
04-06-1949 Liu Shaoqi "Report on fiscal and economic policy issues"

15-06-1950 Chen Yun "The current situation and measures for readjusting industry, commerce and taxation"
zie ook 6 juni 1950 chen yun

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"When the civil war was still raging in October 1949, direct military expenses alone had taken over 60% of the total fiscal expenditure of the new government. Moreover, the new government had adopted the policy of retaining the former regime’s military and government personnel who were willing to submit to the new government. In addition, the number of military, government and administrative personnel in the liberation areas had also increased from 6 million in August to 7 million in November. Such an enormous expenditure had mainly been sustained by the issuance of paper currency." Tax paying

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According to Hou (2008), tax collection during the early 1950s presented a complex and multifaceted challenge. Variations were observed across different years and Regions, as well as in the implementation of tax regulations. Prior to 1952, the agricultural tax was theoretically collected based on a fixed base, although the specific rate differed annually, being adjusted according to the party's requirements. The determination of the "should-be normal yield" (Changnian yingchan liang) for each household's land involved a democratic discussion among peasants, taking into account factors such as the amount of cultivated land, soil fertility, planting practices, and average harvests. The locally ratified figure served as the basis for determining the portion of this base number that households paid in agricultural tax each year. The tax rate ranged from 15 percent to 25 percent, depending on the specific year. Interestingly, the actual crop yield played a relatively minor role in determining the amount of taxes paid by peasants. Consequently, regardless of the claimed high yields of their land, peasants were not obligated to pay more than the predetermined fixed amount. Hou (2008) continues "In the short term, fabricating a high yield would not cost peasants a penny; quite the contrary, if the unit yield was high enough to impress local cadres, local government was likely to reward peasants with a bonus, sometimes a draught animal or sometimes a expensive farm implement, which by no means were trivial. Furthermore, having their names known to local leaders could easily bring peasants a bunch of benefits, such as priority in obtaining government loans, being nominated as model laborers, etc. The model laborers would be provided chances to travel to the provincial capital, to Beijing, or even abroad." This changed in 1953. In 1953, the amount of tax was determined by the land owned by each family. The goal of this campaign “measure land area and determine production levels” was to maximize the amount of grain the government could collect from each peasant family. "This movement hit the newly liberated Regions particularly hard where peasants tended to have hidden a large amount of unregistered land. Old liberated Regions such as north China and northeast China where land reform had been carried out rather radically and peasants had gone through a series of political movements, the impact of the “measure land area and determine production levels” movement on peasants was relatively moderate."

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