China's tax revenue will continue to grow at a rate faster than that of the gross domestic product (GDP) this year, Jin Renqing, director of the State Administration of Taxation, said in Beijing Tuesday.

A detailed budget for the year's tax revenue growth will be released by the National People's Congress, to be convened in March, he said.

"So long as the country's economy maintains its fast and stable development, tax revenue will grow at a higher rate (than GDP),'' Jin said.

Last year, China's economy grew 8 percent and the growth accelerated from quarter to quarter.

The government has yet to announce the GDP growth figure for the fourth quarter of last year. It was 7.6 percent in the first quarter, 8 percent in the second quarter and 8.1 percent in the third quarter.

The strong GDP growth momentum will continue this year, Jin said.

"The country's economic development will be better than last year,'' he said.

Meanwhile, the domestic and international environment is expected to improve, Jin said, adding, "These elements are beneficial to tax revenue growth.''

But Jin said that a number of policy factors could reduce the year's tax revenue.

As of January 1, China began to cut the import tariffs on more than 3,000 items.

The average import-tariff level will drop to 11 percent in 2003 from last year's 12 percent.

In addition, the government will devote a certain amount of tax revenue to support the reemployment of laid-off workers, the development of western areas and the development of high-tech industries.

The government will also cut the business tax on the financial industry by one percentage point to support financial reform.

According to Jin, China's tax revenue rose a year-on-year 12.1 percent to 1.7 trillion yuan (US$204 billion) in 2002.

The tax revenue was equivalent to 16.7 percent of China's gross domestic product (GDP), which represented a rise of 0.9 percentage points from 2001.

The stable tax revenue growth was mainly due to the country's sound economic development, especially the improved performance of enterprises and the stable development of foreign trade, said Zhang Peisen, a senior expert with the administration's Taxation Research Institute.

The government's efforts to beef up tax collections also contributed to the growth, Zhang said.

Tax evasion has become a serious problem in recent years among private and foreign-funded companies as well as State-owned companies in key industries.

Experts have estimated that China loses 30 billion yuan (US$3.6 billion) per year in tax revenues due to multinational firms' tax evasion alone.

Since the beginning of last year, the country has been conducting a nation-wide campaign to fight tax evasion.

A number of companies and high-income people, including the famous movie star Liu Xiaoqing, were found to be evading taxes.

Cui Junhui, deputy director of the State Taxation Administration, said China lost 35 billion yuan (US$4.2 billion) in revenue to tax dodgers in 2002.

He said China will continue to emphasize better tax collection methods this year.

(China Daily January 15, 2003)