Tax revenue up 18.8% in '08, slows in 2H

(Xinhua)
Updated: 2009-02-20 22:12

BEIJING -- China's tax revenue climbed 18.8 percent year-on-year to 5.42 trillion yuan (US$792.68 billion) in 2008, the Ministry of Finance said Friday.

A vendor waits for customers at a clothing store in Shanghai February 10, 2009. [Agencies]

The growth rate was 14.9 percentage points lower than 2007.

Value-added, corporate income and business tax revenues rose 16.3 percent, 27.3 percent and 15.9 percent, respectively.

These three types of tax contributed about 70 percent of the increased revenue of about 859 billion yuan, according to the ministry.

Tax revenues weakened in the second half of 2008, with a decline in the fourth quarter, the ministry said.

Tax revenues were down 0.5 percent, 11 percent, and 12 percent for the months of October, November and December, respectively.

The ministry attributed the lower growth rate in the second half to the slowing economy and government policies that reduced taxations in an effort to boost the economy.

Affected by the sweeping global financial crisis, China's GDP cooled to its slowest pace in seven years, 9 percent in 2008.

Industrial output and corporate profits all plunged, and with them, the deducted tax revenues, the ministry said.

In response, the Chinese government announced a series of measures aimed at preserving economic growth, such as increasing export rebates for commodities and scrapping the stamp tax on stock purchases.

The country had for three times raised export rebates in the second half, for things such as textiles and garments by 2 percentage points to 13 percent starting August 1, according to customs figures.

The government cut the share trading stamp tax from 0.3 percent to 0.1 percent in April last year and scrapped the stamp tax on stock purchases in September.

Stamp tax revenue was 97.92 billion yuan in 2008, down about 102.6 billion yuan, or 51.2 percent, bringing the overall growth rate of tax revenue down by about 2.3 percentage points.