Various evaluations of the tax-farming system

The tax-farming system is a taxation method that allows the government to delegate administrative affairs to private organizations. It is based on a mutual agreement between the government and a private organization. However, tax-farming in Chinese history always had negative implications. Delegating administration to middlemen, particularly in taxation, was linked to exploitation of the people and the malfunctioning of state administration.

Prasenjit Duara's study of rural areas in North China in the 1920s analyzes the penetration of state power to the grassroots level by shifting from a tax system through traditional gentlemen and local communities to the rise of tax “brokerism” during Republican China. According to Duara, the taxfarming system was part of a violent process in which state power infiltrated the private sector to obtain financial resources, and the tax farmers were profit-seeking because they did not belong to local communities. Meanwhile, Susan Mann describes the transition between the two systems as “liturgical.” In the 1930s, the bidding system introduced professional tax contractors, which Mann depicts as the demise of the liturgical tax strategies. In Mann's research, the tax-farming system was introduced by the state's aspirations to expand financial resources, and tax-farming and traditional taxation through guilds were established incompatible binarities.

Mann's study focuses mainly on the emergence and characteristics of the likin tax in the late Qing and it lacks a detailed analysis of the professional tax-farming merchants during Republican China.