Two sides to the tax amendment coin

File photo shows a seal placed on several 100 renminbi notes. The Ministry of Finance and State Administration of Taxation has drafted a new law to create a permanent taxpayer identification number (TIN) for individuals. [Photo/IC]

The highlight of the draft amendments to the Taxation Administration Law is the introduction of taxpayer IDs for individual citizens.

Given the high expectations for the new design to plug loopholes in the taxation system and complement the badly needed personal credit record regime, there is little doubt about its smooth passage through the State Council, China's Cabinet, and the National People's Congress, the top legislature.

At present, only institutional taxpayers have been assigned identification numbers in China. But as the economy diversifies, the private sector prospers and more individuals thrive outside the system, tax collectors are increasingly attracted to once slighted individuals.

From their perspective, the ID will allow the authorities full access to information on each and every citizen's financial conditions and activities, making it more difficult to dodge taxes.

Yet the man on the street may also applaud it, in the belief that it is conducive to fighting corruption. It may. Things will be a lot easier if law-enforcement agencies and the Party's discipline watchdogs want such information to truly serve the anti-graft campaign.

Every honest citizen who fulfills his or her taxpaying obligations in accordance with the law should welcome the new move, because it may help make taxation fairer. The anticipated individual tax reform is at least reportedly aimed at establishing fairer and more reasonable tax bases according to personal financial well-being.

One well-touted side effect of the new move is its function of enhancing taxpayer awareness. Certainly it will render people more conscious of their tax-paying obligations. Or the consequences will be serious.

However, it seems equally, if not more, important to bring the other side of the coin into the limelight.

Official rhetoric about tax awareness has focused exclusively on the obligation of the taxpayer; but few words about taxpayers' rights and interests. High and low, officials call themselves public servants. But they shy away from acknowledging that they are supported by taxpayers' money, and that they owe people a diligent, honest service.

Coming to terms with such simple logic will help the government honor its promise of good governance, because nobody wants to finance a government agency that is against the public good, or "public servants" that bully in the name of the government or the State.