In the first half of this year, China collected 167.8 billion
yuan (US$22.2 billion) in personal income tax revenue, up 28.5
percent year on year, according to statistics from the State
Administration of Taxation, China Youth Daily reported
today.
The growth in income tax revenue was due to rapid income growth
and sound implemention of a self-declaration system for those
making more than 120,000 yuan a year, according to the tax
administration.
The higher tax revenue has also triggered debates over tax
reduction policies and Wu Ruidong, a local taxation official, said
in an article in the paper that the time is ripe for the government
to cut taxes.
According to Wu, China can now bear the fiscal revenue
reduction. Statistics show that fiscal revenue reached more than 1
trillion yuan in 1999 and broke 3 trillion yuan in 2005 and
realized a record 3.9 trillion yuan in 2006.
In addition to the fiscal revenue, the State owned enterprises
(SOEs) under supervision of the central government recorded 720
billion yuan in profit, China's foreign exchange reserve also
reached US$1 trillion.
The official also said tax reduction policies would compliment
the historical tide.
According to Wu, on the one hand, a tax increase would boost
China's fiscal revenue, making the government supply more public
goods and provide better services for the public. Meanwhile on the
other hand, it could stimulate the nation's investment to promote
China's economy.
But the tax jump also imposed heavier load upon taxpayers. The
Forbes Magazine's most recent "Tax Misery Index" chart rated
China as one of the most heavily taxed nations in the world.
In recent years, some other countries, including the United
States, Germany and France have launched tax reduction plans.
Although some experts in China have called on the government to
reduce tax in recent years, but no tax reduction plan has been put
into practice as fiscal revenue concerns.
(China Daily July 25, 2007)
