Tax rev­enue from ser­vice sec­tors climbs rapidly in H1

China Daily (Hong Kong) - - BUSINESS - By LI XIANG lix­i­ang@chi­nadaily.com.cn

China’s tax rev­enue from the ser­vice sec­tors rose rapidly in the first half of the year, re­flect­ing the coun­try’s im­prov­ing eco­nomic struc­ture, the top tax au­thor­ity said on Thurs­day.

The na­tion col­lected 7.08 tril­lion yuan ($1.05 tril­lion) in taxes in the first half of the year, up 8.9 per­cent year-onyear, ac­cord­ing to the State Ad­min­is­tra­tion of Tax­a­tion.

The ser­vice sec­tor ac­counted for 57.6 per­cent of to­tal tax rev­enue, up 1.1 per­cent­age points from the level of last year, which showed the con­tin­u­ous im­prove­ment of the coun­try’s eco­nomic struc­ture, said Zheng Xiaoy­ing, a se­nior of­fi­cial of the SAT.

Re­tail tax grew by 25 per­cent year-on-year in the first half, re­flect­ing that fact that con­sump­tion is play­ing a big­ger role in driv­ing eco­nomic growth, Zheng said.

Tax rev­enue from sec­tors such as sports, ed­u­ca­tion, art and en­ter­tain­ment also surged strongly, in­di­cat­ing con­sump­tion in China is up­grad­ing in more of the life­style ser­vices.

Zheng added that growth of the in­dus­trial sec­tor’s tax rev­enue in the first half re­versed the de­clin­ing trend last year, as the coun­try’s eco­nomic prospects con­tin­ued to im­prove. China’s GDP rose 6.9 per­cent year-on-year in the sec­ond quar­ter, beat­ing mar­ket con­sen­sus for 6.8 per­cent.

To bol­ster growth, China has in­tro­duced a string of mea­sures to deepen tax re­form and to re­duce the cor­po­rate tax and ad­min­is­tra­tive fees bur­den. The coun­try ex­panded the im­ple­men­ta­tion of value-added tax re­form to all in­dus­tries last May, which helped cut tax by about 700 bil­lion yuan.

Other mea­sures in­cluded low­er­ing tax rates for a num­ber of in­dus­tries, ex­pand­ing cor­po­rate in­come tax ben­e­fits to more small firms, and in­creas­ing the tax de­ductible lev­els for re­search and devel­op­ment.

The lat­est of­fi­cial data showed that the to­tal value of tax cuts for small and in­no­va­tive com­pa­nies amounted to 216.9 bil­lion yuan in the first half of the year, up by 29.6 per­cent yearon-year.

The Min­istry of Fi­nance said ear­lier that the gov­ern­ment would fur­ther ex­pand its poli­cies to cut tax and re­duce ad­min­is­tra­tive fees for com­pa­nies, al­though it could mean slower growth of the gov­ern­ment’s fis­cal rev­enue.

Gao Peiy­ong, di­rec­tor of the In­sti­tute of Eco­nomics at the Chi­nese Academy of So­cial Sci­ences, said that in ad­di­tion to the ex­ist­ing re­form in the ar­eas of val­ueadded tax and re­source tax, more pos­i­tive mea­sures should be in­tro­duced for di­rect taxes — such as per­sonal in­come tax and prop­erty tax.

XIN­HUA

Em­ploy­ees of a chair-mak­ing com­pany in Huzhou, Zhe­jiang prov­ince, check orders on­line.

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