New Chinese Tax Law Increases Divorce Cases

April 10, 2013

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. surge 
[surj] (n.) – a sudden rise or increase
Example: High production costs caused a surge in car prices.

2. exempt [ig-ZEMPT] (adj.) – not required to do something (like an obligation or responsibility) that is required of others
Example: Charitable institutions are exempt from paying taxes.

3. workaround [WURK-uh-round] (n.) – a method to solve a problem or difficulty, often in an unusual or clever way
Example: The businessman found a workaround to the policy limiting the sizes of liquor stores by building two smaller stores.

4. illustrate [IL-uh-streyt, ih-LUHS-treyt] (v.) – to make something clear or easier to understand by giving an example
Example: The counselor talked about her own experiences to illustrate the importance of communication in marriage.

5. repeal [ri-PEEL] (v.) – to officially cancel a law or policy; to make a law or policy invalid
Example: The government repealed an old law that was no longer practical or relevant.

Read the text below.

New property tax policies introduced by the State Council of China are causing a surge in divorce cases in the country. 

In an attempt to limit the property market, the State Council imposed a 20% tax on sales of second homes. Primary houses are exempt from tax if they had been owned for over five years.

Married couples who own two houses and want to sell one house have found a workaround to the tax policy. If a couple gets a divorce, each of them can own a house. One of the couple can then sell a house as a primary property and be exempted from the tax. After selling the house, the divorced couple can re-marry.

Within days of the policy announcement, divorce cases increased in Shanghai and other large cities.

In Nanjing City, 294 couples filed for divorce in just one day. In Tianhe District, the number of divorce cases has doubled. Meanwhile, Heilongjiang Province saw three to four times the daily average number of divorces.

Professor Xie Baisan from Fudan University said that high taxes are driving many couples to the much cheaper alternative of divorce. To illustrate, Professor Baisan said that if a couple sells an apartment for 4.5 million yuan ($725,000), they would have to pay 900,000 yuan ($144,802) in tax. On the other hand, divorce costs only 70 yuan ($11) and getting re-married would cost only another 70 yuan.

To avoid further increase of fake divorces, Professor Baisan is calling to repeal the new tax policy.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         In your opinion, how can divorce affect Chinese families and their society?
·         Can fake divorce lessen the value of marriage? Why or why not?

Discussion B

·         Do you think tax laws in your country are fair? Why or why not?
·         Are there any laws in your country that you think should be changed or repealed? Please explain your answer.


April 10, 2013