Tax revenues record positive growth

By Sun Zhe

Tax income finally showed growth after spending most of the year falling, according to figures released late Tuesday by the Ministry of Finance (MOF).

The total tax revenue of the country amounted to 4.5 trillion yuan ($659 billion) in the first nine months of the year, up 2.2 percent from the same period last year, with domestic consumption tax incomes rising 79.1 percent.

Some individual taxes, however, failed to see growth.

The total tariff income of the first three quarters declined 26.7 percent year on year, enterprise income tax was down 0.4 percent, and value-added tax (VAT) slipped 2.4 percent, according to MOF.

The country's economy has been on the upswing since the second quarter, and stimulus measures have pushed several economic indexes into the positive territory, which may have been responsible for the boost in tax revenue, said MOF in a statement.

Single-month tax revenue saw positive growth in June, up 12.2 percent from the same period last year, after recording deficits for the first five months, and stayed positive from then on. The growth of single-month tax revenue over last year widened to 30 percent in September.

Third-quarter GDP growth reached 8.9 percent, an improvement over the first three quarters which saw a 7.7 percent growth.

Enterprises' investments in new machines and equipment are no longer to be taxed under the VAT category, as a result of taxation reforms adopted in 2009, which cut down on the country's VAT income. And major portions of the country's 4 trillion yuan ($586 billion) stimulus package went to fixed asset investment, said Wang Surong, a professor with the taxation department of the University of International Business and Economics.

The jump in consumption tax income was mostly driven by increases in the tax rate of petroleum, liqueur and tobacco, said Wang.

Subsidies have been offered on home appliances, and auto mobiles sold to the country's rural population, and the income of 14 home appliance producers will grow by 22 percent on average in 2009, said a research report released by Shandong-based Qilu Securities.

Auto sales in the first three quarters amounted to 9.66 million units, up 34 percent from 2008, said the China Association of Automobile Manufacturers.

But trade has yet to fully recover. The first three quarter saw exports and imports total $1.65 trillion, down 21 percent from last year, according to the General Administration of Customs.

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