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1/3 of GDP goes to government
By Li Xinran |
September 14, 2010, Tuesday
|
Print Edition
Print Edition
CHINA'S government revenue in recent years accounted for one-third of gross domestic product, according to a study by the country's top think tank.
The study by the Chinese Academy of Social Sciences stands in contrast to a report last month from People's Daily that suggested the burden of taxation in China was relatively low compared with most developed countries.
According to the People's Daily story, the Chinese tax burden last year was only 25.4 percent of GDP, well below the average of developed countries.
But the think tank report, using the standard of the International Monetary Fund, looked at government revenue other than direct taxes - and found that non-tax revenue accounted for much bigger proportion of GDP than is the average in developed countries.
The Chinese government's overall revenue last year was as high as 10 trillion yuan (US$1.48 trillion) or 32.3 percent of the GDP, the academy said.
Besides taxation, the money came from such things as user fees, road tolls, land use charges and pension funds.
"The difference between the study and the August story is because of the different calculation basis," said Professor Li Yang, vice president of the academy.
Liu Zuo, a research fellow with the State Administration of Taxation, admitted that the overall taxation burden would be at least 30 percent or much higher if the academy's standard were adopted.
In the first quarter of 2010, the country's taxation revenue rose 33.2 percent year on year, to 2.63 trillion yuan.
Taxes collected by the central government jumped 34 percent from a year earlier during the period while those collected by local governments rose 31.9 percent.
Revenue from value-added tax rose 13.7 percent; from corporate income tax 41.1 percent; and business tax 37.9 percent.
The administration said the rise was due to the country's economic recovery and the low comparison base of 2009 when tax revenues slumped 8 percent on an annual basis amid the global economic downturn.
The rise in revenue also came after an adjustment in tax policy. In January, China raised the purchase tax on certain vehicles to 7.5 percent from 5 percent.
The study by the Chinese Academy of Social Sciences stands in contrast to a report last month from People's Daily that suggested the burden of taxation in China was relatively low compared with most developed countries.
According to the People's Daily story, the Chinese tax burden last year was only 25.4 percent of GDP, well below the average of developed countries.
But the think tank report, using the standard of the International Monetary Fund, looked at government revenue other than direct taxes - and found that non-tax revenue accounted for much bigger proportion of GDP than is the average in developed countries.
The Chinese government's overall revenue last year was as high as 10 trillion yuan (US$1.48 trillion) or 32.3 percent of the GDP, the academy said.
Besides taxation, the money came from such things as user fees, road tolls, land use charges and pension funds.
"The difference between the study and the August story is because of the different calculation basis," said Professor Li Yang, vice president of the academy.
Liu Zuo, a research fellow with the State Administration of Taxation, admitted that the overall taxation burden would be at least 30 percent or much higher if the academy's standard were adopted.
In the first quarter of 2010, the country's taxation revenue rose 33.2 percent year on year, to 2.63 trillion yuan.
Taxes collected by the central government jumped 34 percent from a year earlier during the period while those collected by local governments rose 31.9 percent.
Revenue from value-added tax rose 13.7 percent; from corporate income tax 41.1 percent; and business tax 37.9 percent.
The administration said the rise was due to the country's economic recovery and the low comparison base of 2009 when tax revenues slumped 8 percent on an annual basis amid the global economic downturn.
The rise in revenue also came after an adjustment in tax policy. In January, China raised the purchase tax on certain vehicles to 7.5 percent from 5 percent.
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