China Announces Record Tax Revenues In 2004

by Mary Swire, Tax-News.com, Hong Kong

12 January 2005

The Chinese tax office announced yesterday that the country’s tax revenues reached record levels in 2004, rising more than 25% over the year thanks to rapid economic growth.

In an announcement in Beijing, Xie Xuren, director general of the State Administration of Taxation, stated that tax revenues, excluding customs tariffs and agricultural taxes, totalled 2.57 trillion yuan (US$313 billion) in 2004, up by 525.6 billion yuan (US$64 billion), or 25.7%.

The government attributed this rapid growth in revenues to increasing domestic and foreign trade, higher profits from Chinese enterprises and a stricter policy on tax compliance and tax evasion.

Tax rebates for exporters also grew significantly last year, when the authorities paid a total of 420 billion yuan (US$51 billion) in rebates, up 106% year-on-year.

Going forward, Xie stated that the government will seek to restructure the corporate tax laws, including the separate systems for foreign investors and domestic taxpayers, while the individual income tax system will also be overhauled and the consumption tax net expanded.

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