Thursday, March 6, 2008

Chinese Fiscal Income Touches 5.13 Trillion Yuan for 2007

by Richard York

According to the Chinese Ministry of Finance’s figures the fiscal revenue of China for the year 2007 touched 5.13 trillion Yuan that is US$733 billion. This fiscal revenue for the country is an increase by 1.25 trillion Yuan, or 32.4% year on year. The main source of revenue for China is the tax income and the revenue for the country in the last year was 4.56 trillion Yuan, being an addition of about 1.15 trillion Yuan that is it increased by 33.7% against the earlier year 2006. The revenue generated by the tax income for China has a total share in the overall fiscal revenue of the country to as much as 88.9% and hence it is the major source of the income for the country.

The revenue generated by the non-tax income stood at 569.1 billion Yuan, which is an increase by 105.67 billion Yuan that is 22.8% year on year. The contribution of the non-tax revenue to the total income of the country amounts to 11.1%. These revenue figures of the country show a rapid increase in the tax revenue of China. According to analysts the reason behind this great increase in tax revenue of the country is because of big increase in the real estate investment in the country as well as a quick development of the industrial and commercial sectors of the country. Analysts also cite the heavy economic yields of enterprises and vigorous transactions in the stock exchange of the country.

The income tax that comes from the enterprise is the second highest source of income for China and in the last year it stood at 876.95 billion Yuan which was an addition by 37.9% as against the earlier fiscal year. The income tax from enterprises contributed as much as 19.2% for the total tax revenue of China in 2007. There were also considerable annual increases in the taxes collected from oil industry, telecom equipment manufacturers, the construction material sector and breweries in the country. The increase in taxes from the oil industry stood at 173.1% while the proceedings from the telecom equipment manufacturers accounted for 99.7%. The construction material industry of China yielded 60.3% taxes whereas the taxes from the breweries saw an increase of about 52.1%.

The considerable growth in the taxes according to analysts is because of the highly enhanced economic efficiency of the industrial enterprises of the country. In the first eleven months of the year 2007 the profits of China’s bigger enterprises grew by 36.7% and for example the profits of the insurance industry witnessed an increase by 353%. The income from VAT or the Value Added Tax reached to 1.55 trillion Yuan which is an increase by 21% against the earlier year 2006. Rapid growth was especially witnessed by the industrial sectors such as telecom equipment, refined oil, construction material and nonferrous metal. Consumption tax is another important revenue category in China’s revenue, which hit 220.69 billion Yuan in 2007 which was an addition by 17% against the increase in the year 2006 for China.

 

 

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