International Experiences of Tax Policies on Natural Disaster Response and the Implications for Chinese Policy

Abstract

Developed countries, such as the USA, Japan, Korea and Australia, have different tax policies responding to natural disasters. Although these contexts differ from China, there are some core themes from those policies which are transferable to China. These themes are policies which are universal, flexible, holistic, multi-leveled, pragmatic and with measurable outcomes. In order to integrate such principle into China’s natural disaster tax policy, firstly, this paper proposes that the items of tax preference on natural disaster response should be normalized and multi-leveled, in order to enhance the speed of their application post disaster. Secondly, China’s relevant policies should thus be focused on restoration and recovery from disaster should be fortified. Thirdly, the preferential income tax treatment should be enhanced. Fourthly, the effect of tax expenditures should be calculated and examined regularly. Fifthly, international cooperation should be established. Finally the tax policy should be incorporated into in national disaster prevention and reduction law system, etc.