China's tax revenue surged 27.1 percent year-on-year during the
January-October period, and analysts expect strong growth to
continue next year.
Ni Hongri, a senior researcher with the State Council
Development Research Center, said tax revenue should continue to
rise rapidly since it is largely determined by stable economic
growth and consumer prices.
In the first nine months of this year, GDP advanced 9.5 percent
while the CPI rose 4.1 percent. Tax revenue jumped 26.3 percent in
the period.
"The Chinese economy is expected to grow between 8.5 and 9.2
percent, and the consumer price index to grow less than 5 percent
next year," Ni stated. "The country's tax revenue is likely to rise
about 20 percent next year."
Ni also noted that the government is taking steps to improve tax
collection, which will also help to pull tax revenue up.
Senior economist Gao Peiyong, of the Chinese Academy of Social
Sciences, agreed that tax revenue will continue to rise strongly,
but also noted that factors such as tax reform will put downward
pressure on the final figure.
Premier Wen Jiabao said in March this year that the government
would cancel the agriculture tax within three to five years.
"The government is likely to speed up that process next year,"
Gao said.
There are also plans to expand trial reform of the value-added
tax system next year. Currently, companies operating in the old
industrial bases of northeast China can claim tax deductions when
buying new plant and equipment, an innovation that is likely to
spread elsewhere in the coming year.
Zhang Peisen, a senior researcher with the Taxation Research
Institute of the State Administration of Taxation, said the
macroeconomic cooling-off measures the government implemented this
year would also work to slow the rise in tax revenue.
"The measures have had a great impact on fixed asset investment
and industrial output, which have a close relationship with tax
revenue growth," Zhang said.
Growth in tax revenue slowed to 25.8 percent year-on-year in the
third quarter this year, down from 26.9 percent in the second
quarter.
Zhang stated that the healthier economy would continue to fuel
growth of at least 25 percent in tax revenue next year.
(
China Daily December 21, 2004)