China's Tax Revenue Up 13% In July

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

21 August 2008

China's Ministry of Finance (MOF) issued a statement this week announcing that the country's tax revenue rose by an impressive 13.8% year-on-year in July to 532.33bn yuan (USD77.4nn).

According to the ministry, last month VAT revenues were up 21.5% at 148.53bn yuan, consumption tax revenues grew by 15.1% to 20.17bn yuan, and individual income tax revenues rose by 8.2% to 28.09bn yuan.

However, corporate income tax receipts were down 4.2% year-on-year at 149.64bn yuan, and stock stamp tax revenues declined 71.8% from a year earlier to 4.97bn yuan as the daily transaction volume on the stock market in July slumped by almost 30% compared to July last year, averaging 74.9bn yuan.

Earlier in the month, the ministry announced that first half tax revenues totalled 3.14 trillion yuan, a rise of 33.5% compared with the same period in 2007. The government has been keen to point out, however, that surging tax receipts are more the result of a rapid increase in economic development within the country rather than a growing tax burden.

The MOF also stressed that the government has been reducing tax rates in a number of areas, such as by cutting the income tax rate on domestic enterprises to 25% from the previous 33%, and by raising the threshold for individual income tax to 2,000 yuan from 1,600 yuan.

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