Tax expert Zhang Peisen said it was close to the 12 percent growth that he had predicted at the beginning of the year.

"Revenue growth was mainly achieved through the country's rapid economic development, which grew a year-on-year 7.9 percent during the first nine months," said Zhang, a senior researcher with the administration's Taxation Research Institute.

The government's efforts to beef up tax collection also contributed to growth, he said.

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

Experts predicted China annually loses 30 billion yuan (US$3.6 billion) in tax revenue due to multinational firms' tax evasion alone.

Since the beginning of the year, the country has launched a nationwide campaign against tax evasion.

A number of companies and higher income people, including famous film star Liu Xiaoqing, have been accused of tax evasion.

Premier Zhu Rongji said strengthening the collection of taxation and its management is an urgent task for local governments to increase revenue and push for sustainable and sound economic development.

China began to practise a more strict tax collection management method on companies on Tuesday.

This method requires companies to register themselves with tax departments within 30 days of obtaining business licences.

Taxpayers will also be required to install and use tax control equipment and send related figures and references to tax departments.

The multinational companies which took advantage of "related" companies to evade taxes will be punished.

"The new method will play an important role in tax revenue growth in the coming years," Zhang said.

According to the State Administration of Taxation, the State collected 464.2 billion (US$55.9 billion) in value-added tax and 183.8 billion yuan (US$22.1 billion) in business tax during the first nine months of this year, up 12.2 per cent and 15.2 per cent respectively on a year ago.

(China Daily October 17, 2002)