yanke 鹽課, the salt tax

The taxation of salt made out an important part of the state revenue in traditional China. During the Western Zhou period 西周 (11th cent.-770 BCE) it was part of the taxes (fu 賦) and tributes (gong 貢) delivered from the mountain and swamp regions, and is also mentioned in the Confucian Classic Shangshu 尚書 as one of the tributes delivered to Yu the Great 大禹. The economic policy of Guan Zhong 管仲 (725-645 BCE), counsellor in the regional state of Qi 齊 during the Spring and Autumn period 春秋 (770-5th cent. BCE), included the production and distribution of salt from the sea shore as a joint project of the government and the local population. Marine salt was produced in salterns and bought by the government. The latter reserved the right to sell the salt, and thus obtained a considerable revenue. This procedure was called "salt policy" or "salt administration" (yanzheng 鹽政), the tax was called "salt fee" (yanke 鹽課).

The Qin dynasty 秦 (221-206 BCE) exploited the population so far, that word was going that the field tax (tianfu 田賦), the poll tax, and the fees for the purchase of salt and iron was twenty times as high than in earlier ages. Their successor, the Han dynasty 漢 (206 BCE-220 CE), was in dire need of money to sustain the military campaigns against the steppe federation of the Xiongnu 匈奴 and in the Western Territories. Emperor Wu 漢武帝 (r. 141-87 BCE) therefore introduced in 119 BCE the state monopoly on the production and sales of salt and iron. Fierce discussions at the court (reflected in Huan Kuan's 桓寬 treatise Yantielun 鹽鐵論) nevertheless led to a relaxation of this monopoly. Sometimes the monopoly was carried out quite strictly, like under the reign of Emperor Zhang 漢章帝 (r. 76-88 CE) of the Later Han 後漢 (25-220 CE), but sometimes not, and replaced by taxation.

This oscillation between a strict monopoly and free trade continued during the Southern and Northern Dynasties period 南北朝 (300~600). Between 583 and 721, the government even refrained from taxing salt at all. This policy changed drastically under the impact of the rebellion of An Lushan 安祿山 (703-757), in the mid of the Tang period 唐 (618-907). An Lushan and other military commissioners (jiedushi 節度使) controlled large and economically productive regions more or less autonomously, so the central government had to look for new sources of revenue. In 758 a new policy of government control was therefore introduced. The production of salt and iron, and also that of money, was in the hands of private entrepreneurs, while the government bought their products and distributed and sold them.

Liu Yan 劉晏 (716-780), Counsellor-in-chief of Emperor Daizong 唐代宗 (r. 762-779) of the Tang dynasty, went over to a taxation policy, and laid the distribution and the sales network of salt into the hand of private merchants. These merchants acted as commissionaries of the government and transported salt to military garrisons as well as to the newly created salt storehouses (changping yancang 常平鹽倉). These storehouses served to regulate the local salt price in the same way as granaries did. When salt on the market was scarce, the salt reserves in the storehouses were thrown on the market in order to bring down the salt price. The institution of touring brokerages (xunyuan 巡院) was created in three regions, namely Huaibei 淮北 (northern Jiangsu, northern Anhui, Shandong), Jiangnan 江南 (south of the Yangtze River) and Lingnan 嶺南 (Guangdong, Guangxi). They controlled the production of salt and arrested smugglers (jisi 緝私).

The last of the Five Dynasties 五代 (907-960) merged the salt tax with the land tax that had been unified in the twice-taxation method (liangshuifa 兩稅法) in the 8th century. The attached salt tax, collected in summer and in autumn, was then called liangshui yanqian 兩稅鹽錢. Salt was produced by so-called "salt households" (yanhu 鹽戶), and the workers (yanding 鹽丁) were given a salary by the government. Yet in turn the salt delivered to the authorities was defined as a kind of tax (in the form of the traditional "tribute"), and included the salt tax proper.

The Song dynasty 宋 (960-1279) introduced the equitable exchange method (zhezhongfa 折中法). Merchants were commissioned to transport grain and horse fodder to the border garrisons. These items were to be purchased by the merchants themselves, but they were given salt certificates (jiaoyin 交引) redeemable in the salt-producing regions like Jiang-Huai (Jiangsu). Receiving salt in these regions from the salt-producing households (yanhu), the merchants were free to sell salt on the markets. Emperor Shenzong 宋神宗 (r. 1067-1085) changed this policy to the "salt voucher method" (yanyinfa 鹽引法), during the reign of Huizong 宋徽宗 (r. 1100-1125) called "voucher method" (chaopiaofa 鈔票法). Merchants bought salt vouchers (yanchao 鹽鈔), collected the salt in the salines and salterns, and distributed it on the market, thus obtaining private profits. It can be seen that the government policy had changed from direct taxation, aimed at winning higher revenues, to one of an even and fair distribution of an important commodity. This method saved expenditure by laying the organization into the hands of private entrepreneurs. The salt tax (then called yinke 引課) remained part of the state income. The terminology of this system changed somewhat in the coming centuries.

The Yuan dynasty 元 (1279-1368) called the method yinyanfa 引鹽法, and the salt certificates, yanyin 鹽引. Their "price" (yinjia 引價) was the salt tax, but merchants were ordered to sell the salt in defined territories, and could thus earn profits. Apart from this way, the salt tax was also yielded from the salt producers directly who paid a "salt pan tax" (zaoke 灶課).

The salt certificates method (yinfa 引法) during the Ming period 明 (1368-1644) met the problem that there were often more certificates than salt available. Yuan Shizhen 袁世振 (jinshi degree 1598) therefore invented in 1617 the "method of tying up salt (certificats)" (gangyafa 綱鹽法). The certificates owned by merchants (i.e. their assets) were collected and registered in booklets (gangce 綱冊) and had to be submitted to the government if these were full. On the base of these "holdings" (woben 窩本) they were allowed to collect salt in the salterns and throw it on the market, thus being disbursed their assets.

The salt revenue during the Qing period 清 (1644-1911) came from three sources, namely the "pan tax" (zaoke) collected from the producers, the certificate tax (yinke 引課) posed on the shoulders of the salt merchants – it was called "main tax" (zhengke 正課) because it made out the largest part of the salt tax revenue -, and a large amount of fees called "miscellaneous taxes" (zake 雜課) that were levied in connection with the salt business. From time to time new taxes were invented, particulary under the financial distress as a cause of the turmoils of the mid-19th century.

In 1831 the governor-general (zongdu 總督) of Liang-Jiang 兩江, Tao Shu 陶澍 (1779-1839), adjusted the system by the introduction of the salt certificate method (piaofa 票法). This was a kind of tax farming, by which everyone - and not just professional merchants - was allowed to collect taxes, and was in turn given salt vouchers. The Qing dynasty also introduced a method of requesting irregular contributions (juanshu 捐輸, after 1866 called baoxiao 報效) from the salt merchant associations, as a kind of skimming off the revenue earned by the salt business. The "pan tax" was collected by commissioners-in-chief of the Salt Tax office (yankesi tiju 鹽課司提舉, during the Qing called yankesi dashi 鹽課司大使). They were subject to the Salt Distribution Commission (yanyun shisi 鹽運使司) or the salt control circuit (yanfa dao 鹽法道). The first salt control circuits had been Guangdong and Guanghai 廣海 during the Yuan period, and then the system was expanded to Liang-Huai 兩淮, Liang-Zhe 兩浙, Changlu 長蘆 (Tianjin and Zhili 直隸, i.e. today's Hebei), Shandong, Fujian, Guangdong, Sichuan and Yunnan.

Even after the demise of the Qing empire the salt tax remained a substantial part of the state income. In 1913, for instance, the Beiyang Government 北洋政府 settled foreign debt by its salt tax revenue. In 1932 the salt tax was abolished by merging it with the land tax to the so-called (salt) spot tax (changke 場課).