China’s Tax Revenues Up By More Than 20%

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

12 July 2005

Tax revenues in China rose by 21.7% in the first half of 2005 compared to the same period last year, although revenues from stock market transactions were down sharply, the State Administration of Taxation has reported.

Excluding customs and agricultural levies, the tax department's figures show that tax revenues nationwide totalled 1.581 trillion yuan (US$191 billion) in the first six months of the year.

However, tax revenues accruing from stamp duty on securities transactions fell markedly in the first half of 2005, by 71.4% to 2.9 billion yuan, a statistic which the government has blamed on adjustments to stamp duty and a lack of interest in the country's stock markets.

In a bid to revive the domestic markets, the government last month temporarily cancelled the corporate and individual income taxes and stamp duty for shares involved in the state share reform trial. This trial reform programme seeks to float non-tradable shares previously held by the government, which account for about two-thirds of the domestic stock market capitalisation.

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