Tax Collections In China Jump Significantly
July 20, 2011 Taxation in China
Tax revenues in China have surged ahead by 30 percent in the first half of the year, giving the government extra room to handle the continuously rising debts held by local governments.
In a statement released on July 19th the Ministry of Finance of China revealed that in the first half of the calendar year national tax revenues had risen by 29.6 percent, when compared to the same period last year. According to data contained in the release, total tax revenues for the six months reached more than RMB 5 trillion (USD 773 billion). The half year tax revenue increases is below the 32.4 percent growth in tax collections seen in the first quarter of the year, but the Ministry of Finance says that the government is still pleased with the latest results.
The rise in China’s tax revenues was attributed to stringent efforts to enforce tax collection programs by national tax authorities. Steadily increasing prices of consumer goods and commodities, and the China’s 9.5 percent economic growth rate also contributed to the increase in tax revenues. During the first half of the year personal income tax collections were reported to have shot up by 35.4 percent. Revenues from corporate income taxes also rose by 38.3 percent. Consumption tax collections grew by 20.2 percent. Customs duties and property taxes saw increases of 32.1 percent and 24.4 percent respectively.
According to a report released last month by the National Audit Office of the People’s Republic of China, at the end of the 2010 calendar year local governments across the country held an approximate RMB 10.7 trillion (USD 1.65 trillion) in debts. The country’s steady growth rate and increasing tax revenues should ease any investor fears regarding the governments’ ability to address these debts.
Photo by upton