Zhang Peisen, a senior expert with the Taxation Research Institute, said this year's tax revenue is expected to grow 13 percent, compared with last year's 12.1 percent.

He based his predictions on the country's sound economic development expected this year.

"The country's consumer goods market will pick up, and non-government investment, including foreign investment, will become more active," Zhang said.

Economic growth is expected to contribute about 60 percent to the total tax revenue this year, he said.

Meanwhile, the government will continue to beef up tax collection.

"This will contribute more than 30 percent to the total tax revenue," Zhang said.

Director Jin Renqing of the State Administration of Taxation earlier said the government would expand tax supervision to cover taxpayers who paid annual value-added tax and consumption tax income of more than 5 million yuan (US$602,410) and to those who paid annual business income of more than 1 million yuan (US$120,000).

The government will also launch investigations into suspected tax evasion cases, he said.

All companies were equal under the law, whether domestic or foreign-owned, and tax supervision never targeted any one specific enterprise, Jin said.

Cui Junhui, deputy director of Jin's administration, said China lost 35 billion yuan (US$4.2 billion) in revenue to tax dodgers in 2002.

"We are determined to forge ahead with our investigations," he said. "We will bring whoever is involved to justice."

This year, tax authorities will focus on "certain industries, regions and tax categories," Cui said, but did not elaborate.

An earlier report said those to be targeted included movie stars, sport agents, real estate middlemen and other big earners.

Zhang Xueying, a senior economist with the State Information Center, said steady tax revenue growth is still badly needed to fund the country's expensive proactive fiscal policy.

But steady growth could be hard to achieve, since a number of policies would reduce the year's tax revenue, Zhang said.

As of January 1 this year, China has begun to cut import tariffs on more than 3,000 tax items.

The average import tariff level will drop to 11 percent this year from last year's 12 percent.

The government will also set aside a certain amount of tax revenue to support the reemployment of laid-off workers, development of western areas and high-tech industries.

Meanwhile, the government will cut business tax for the finance industry by one percentage point to support its reform of the sector.

(China Daily February 6, 2003)