This could be referred to as a cultural difference, but I will in this essay try to illustrate that this mainly reflects the crises in Beijing in keeping China strongly centrally governed. Furthermore, I intend to cover some of the hottest political issues today from the point of differences between the Swedish and the Chinese tax systems. General fundamental differences Sweden is considered a very well organised society. Therefore taxes can easily be collected in a great number of ways like VAT, corporate taxes and capital taxes. Taxes are used as an effective means of equalising income disparities.
China is the complete opposite.
1.2 billion inhabitants is not easy to control, especially not as they live under very different economic conditions and environments. It was not until in 1994 that China got a nation wide tax administration and there has been a complete absence of social security contributions, which were regarded as enterprise costs. This is all very well if the government controls all enterprises, so the price of the inputs can be set low and the price of the finish gods set high. Yet that is no longer the case. In fact the SOE is more to be considered as a burden to the government, with the commbinate-system that guarantees life long employment and pension.