China's Tax Revenues Rise 22.6% in 2011
Recently-released final figures from China’s Ministry of Finance show that, in 2011, its tax revenue reached a total of RMB8.97 trillion (USD1.42 trillion), an increase of more than RMB1.65 trillion or 22.6% over the previous year.
The significant rise in tax collections was said, in particular, to be the result of the country’s continued economic growth and price inflation. Consequential on the resultant rise in corporate profitability, corporate tax revenues rose by more than 30.5% to RMB1.676 trillion, or 18.7% of total tax revenue.
In addition, with the increases in domestic consumption and rise in imports during 2011, value-added tax VAT, business tax, and consumption tax revenues increased by 15.0%, 22.6%, and 14.2%, respectively. At a total of RMB2.427 trillion, VAT is now 27% of total Chinese tax revenues, compared to business tax at 15.2%.
In comparison, individual income taxes reached RMB605.4bn in 201, an annual increase of more than 25%. However, collections of individual income taxes decreased in the final quarter of the year, mainly due to the effect of the increase in the basic tax threshold from September 1.
It was pointed out that, while overall tax collections are still rising, as growth in the economy gradually cooled down over the course of the year, so did the increase in Chinese revenue growth. Tax revenue growth in each successive quarter of 2011 was 32.4%, 27.2% and 22.6% and 6.8%. An actual fall in tax revenues has been seen from the automotive and property sectors.