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       The main capital supporting our national education development comes from the investment by the country. After the closing of the fifteenth session of our party, the Party Central and State Council have made an important decision that since the year of 1998, the percentage of education capital in the central financial expense will increase by one percent annually for five consecutive years. Only by this issue, the education capital in the central financial expense had increased 31.4 billion from 1998 to 2001; by the end of 2002, the increased education capital accumulated to be 48.9 billion. With the fulfillment of the capital, the proportion of the financial expense on education increased year by year.

 

       With this urban and rural educational fund surcharge, the government intends to speed up elementary education. The surcharge is the second biggest source for educational fund after government budgetary appropriations. This is particularly true of the rural educational fund surcharge, which has become an important source of money for primary and secondary schools in rural China. The State Council stipulates that the rural educational fund surcharge is collected at the rate of 1.5 percent-2 percent of the net incomes of farmers of the previous year and that the urban educational fund surcharge, at the rate of 3 percent of three taxes (the value-added tax, business tax and consumption tax). The rural educational fund surcharge is collected by the township government New village teachers. and the urban educational fund surcharge is collected by the taxation department. Since the beginning of its collection in 1987, the surcharge has provided a financial guarantee for improving educational conditions, increasing remuneration for Minban (non-government-run)(community-hired) teachers and making nine-year compulsory education universal.
 
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