China Reports 30 Percent Increase In Tax Revenues Amid Local Debt Worries

BEIJING (Kevin Yao) - China's tax revenues in the first half of the year surged 29.6 percent from a year earlier to 5 trillion yuan ($773 billion), underscoring the government's ability to deal with any fallout from piles of local government debt.

Tax revenue growth slowed from a 32.4 percent rise in the first quarter of this year.

Revenue from corporate income tax surged 38.3 percent in the first half while personal income tax climbed 35.4 percent and consumption tax rose 20.2 percent, the Ministry of Finance said in a statement on its website (www.mof.gov.cn).

Receipts from customs duties rose 32.1 percent and those from property tax rose 24.4 percent, the ministry said.

The ministry attributed the strong tax revenues in the January-June period to solid economic growth, rising corporate earnings as well as higher prices that boosted receipts.

Stringent tax collection also helped, it added.

China's fast economic growth and hefty government revenues will help contain potential risks from swelling local government debt as a result of Beijing's massive economic stimulus during the global financial crisis, analysts say.

The national auditor said last month that local governments had chalked up about 10.7 trillion yuan in debt as of the end of 2010, 4.97 trillion yuan of that being held by local government financing vehicles.

Last week, China reported a fiscal surplus of 1.25 trillion yuan in the first half as steady economic growth and rising prices lifted government revenues.

China's economy, which grew a faster-than-expected 9.5 percent in the second quarter, is expected to retain much of its momentum in the coming quarters despite policy tightening, according to the latest Reuters poll. ($1 = 6.469 Yuan)

(Editing by Jacqueline Wong)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[studlyguy]

12:16 PM on 07/20/2011

America the the new slave labor nation,but China is going to fall also whatever goes up like what is happening in China ,will come down ,but 100 times worse then when it was going up,centuries of this scenario have shown this ,and we're experiencing the downward sprial here in America and Europe as we speak,and it will spread to China,we're heading into a worldwide depression 2011/12.

[DAE]

02:58 AM on 07/20/2011

OK, I just read through all of the comments on this tread. My conclusion? They illustrate the total confusion of the commentators as to what's going on here or in China. Given the level of ignorance displayed I have absolutely no hope for the future of this country.

[MicahTK]

02:47 AM on 07/20/2011

Everyone should read this article.
http://www.moneynews.com/StreetTalk/Steve-Wynn-Obama-Killing/2011/07/19/id/404088?s=al&promo_code=CA3B-1

[automan 57]

01:16 AM on 07/20/2011

America ; guess who the Chinaese are going to pass these new taxes onto ??? Times up America it is you !!!

[txdmerc73]

12:44 AM on 07/20/2011

I am so sick of hearing abt the Chinese Economy! theres nothing but "made in china" garbage circulating in the US. hope chinese raise the taxes so high the manufaturers would move their businesses back to the US and then there would be more jobs and a more robust economy for us.

[Sam025 tang]

04:34 AM on 07/20/2011

There is no way that low-end manufacturing jobs will ever go back to U.S.

If it's not China ,It will be other developing countries like Vietnam, Indian , Cambodia ,etc.

[blueken]

11:45 AM on 07/20/2011

If low-end manufacturing jobs came back to the U.S. who would do them? In the long term, automation is going to make low-end manufacturing jobs obsolete. No matter how cheap labor is, a machine does it cheaper and better. We need to stay ahead of the curve in education. It's our only chance. It would also help if we did away with MBA's and replaced CEO's with engineers. People who can see beyond the next quarter.

[bill beres]

11:08 AM on 08/13/2011

bill beres Chinese crap?? Then forget about the train engines, parts of airplane engines, car parts, Ventilators in hospitals that keep you alive ---though from your comments, you may want to go Mexico instead since you don't trust anyone but yourself. 90% of power tools as finished goods, lawn mower parts are Chinese. You would need to wrte a check for 30% for the difference of 50% of what you own. How many millions of cars have we recalled over the last 25 yeras that were made in the US?

[DK111]

12:31 AM on 07/20/2011

My gosh, China is Communist (Socialism on steroids) and raising taxes!! How can it be that they have the strongest economy in the world? Maybe it is because they have no Teapartiers screwing up their economy.

[MicahTK]

02:05 AM on 07/20/2011

Do you really think China is so great?

[bill beres]

11:10 AM on 08/13/2011

bill beres Numbers do not lie. We had those same numbers for over 100 years. It is what it is.

[bcrnbs]

03:00 AM on 07/20/2011

the goverment runs the country, you ither produce or you die and are forgotton..
its that simple

[blueken]

11:47 AM on 07/20/2011

SO what do you think of politicans in this country that want you to produce or die and be forgotten. Here is a hint, those politicans want to do away with SS and Medicare.

[waltwww]

11:44 PM on 07/19/2011

Bush did it! LOL You people think only the rich will be taxed. We will see.

[elofudpucker]

12:06 AM on 07/20/2011

If you are talking about Bush #1, You need to do a little research without the LiberALL Talking points of that time. Bush didn't raise Taxes, He let some kind of exemption expire that YOUr buddies voted for and he did not VETO it........Nuff Said.....

[nancy1113]

01:40 AM on 07/20/2011

What's with all your NUFF's? Let me help you out, it's spelled enough.

[cmcclarty]

03:50 AM on 07/20/2011

True Obama campained over and over and said if you make less then 250 grand your taxes wont go up a single dime! Yeah right. taxes have already went up at the pump.

[samuel liu]

02:44 PM on 07/20/2011

that's not tax. that's supply and demand.

[stinkfistula]

11:29 PM on 07/19/2011

welcome to the difference between free enterprise and capitalism.
kill your bosses

[valdez2795]

10:49 PM on 07/19/2011

Yes, we have a huge debt. Which congressmen over the years have over spent our tax dollars?
Did they not notice what they were doing? Both parties are responsible for this economic crisis we find ourselves in. Who is courageous enough to print and make public the name of the some not all the living congressmen who are responsible for the situation we find ourselves in. The future of this country will be decided in a few weeks. When Clinton left office he had a surplus and it went away, but the house was controlled by the Republicans. Give us a balanced budget law and term limits.

[PELAGIUS2]

12:39 AM on 07/20/2011

Followed by a Republican administration that passed massive tax cuts and started two off the books wars. There went the surplus and the chance of paying down the debt by.....last year, actually. It seems that budget projections balanced or otherwise don't survive past the next biennium.

The constitution sets congressional terms, I doubt if term limits can be imposed without amending the constitution.

[bquinn1641]

01:50 AM on 07/20/2011

Get off the debt and on to growth. Notice that tax revenues were up in China after massive government support for their economy. This public relations scam about the debt is Herber Hoover politics not good economics.

[decyle]

10:44 PM on 07/19/2011

And their economy just keeps on growing... Maybe we can teach the GOP Congressmen to read Chinese.

[ewd4610]

11:14 PM on 07/19/2011

China can never be compared to the USA.

[stinkfistula]

11:27 PM on 07/19/2011

no shit.....they beat us to death,,,,,,,,wonder where the yellow went
they brush their teeth with PEPSODENT.....suck on fool

[Travelertoo]

10:16 PM on 07/19/2011

I guess the best economy on earth has no trouble taxing the rich.

[oceana6695]

12:09 AM on 07/20/2011

They also seem to have no problem collecting from the rich either...LOL... They deal with tax cheats a little differently in China...

[bcrnbs]

03:01 AM on 07/20/2011

lol, they deal with poor people and radical the same way...
if obama was in china, he would be in prison .....

[MicahTK]

02:10 AM on 07/20/2011

they have no trouble taxing everyone.

[bcrnbs]

03:02 AM on 07/20/2011

not with a gun to your head, you love paying tax's

[jackinjax]

09:17 PM on 07/19/2011

That's the healthy way to "increase revnues", economic growth, not through tax increases, which has the exact opposite effect.

[DAE]

02:16 AM on 07/20/2011

They just raised the tax threshold to $450 a month exempting medium wage workers. Low wage workers are not taxed.

[Sam025 tang]

04:40 AM on 07/20/2011

Actually the new tax threshold is 3500RMB(542.0730 USD today's exchange rate) and it's passed in June ,30, 2011

[zbb]

05:58 AM on 07/20/2011

China's new personal income tax policy cuts tax rate for individuals who gets paid lower than 21500RMB monthly(approx $40,000 annually), meanwhile increasing tax rate for those who gets paid higher than that. I see this an obvious tax cut for the majority, as well as a more equal wealth distribution.

Also, personal tax income only counts for 6% of China's total tax revenue.

[jackinjax]

04:17 PM on 07/20/2011

My point wasn't that we should be more like China. It was how much more they are taking into thier coffers due to economic growth. You can't grow the economy by increasing taxes on capital, it has a diminishing effect.

[Timma]

09:09 PM on 07/19/2011

Borders laying off 11,500, Cisco 11,000 and Goldman Sachs 1,000. That's what Repubs mean by all them wealthy types creatin' jobs for ya'll.

[andyg]

09:17 PM on 07/19/2011

Don't you mean Obama.

[genowhitaker]

12:55 AM on 07/20/2011

No, please pay attention. The Republicans claim that lower taxes and billions in tax dodges and shelters creates jobs. We can all see how well that has worked for the last 10 years.

[Lb Catz]

02:02 AM on 07/20/2011

I don't think he meant President Obama. I haven't seen one job created by the Republicans. Only cuts to services for the poor.

[bcrnbs]

03:04 AM on 07/20/2011

thank obama, no business is going to expand while obama is in office, they have no way of knowing what this jack off will do... they are not taking the chanches... they simple
reduce their problems and go with minimum resorces and set back and wait..

better than haveing to wind up bankrupter when obama slaps you with tons of tax and
health care you cant afford

[bi1]

09:03 PM on 07/19/2011

Does this mean that china increase the required amount taxes or the amount the chinese gov collected increased because of the increase in buisiness

[andyg]

09:18 PM on 07/19/2011

Increase in buisiness, but don't shout it. The left only think tax raises increase revenue.

[cmcclarty]

04:16 AM on 07/20/2011

And it dont! Im not rich or ever have been but if you taxed the max out of the rich it wont make a dent. they will have to go after the upper and middle class then and thats people who make under 250 grand.There is alot of stupid stuff that gets put into budgets that should not be there I dont care about the mating habits or why dont red and black ants get along.If you give congress alot of money they spend it like drunks.

[bi1]

09:51 AM on 07/20/2011

The article was very vague

[mjmanack]

08:12 PM on 07/19/2011

they are coming to america and need more boats.