The SARS outbreak had almost no negative impact on taxes raised from the industrial sector in May, according to the State Administration of Taxation.

Value-added tax collected from the industrial sector stood at 50.9 billion yuan (US$6.1 billion) in May, an increase of 23.7 per cent compared with May 2002, the administration said.

The growth rate was 10.5 percentage points faster than April, it said.

Value-added tax collected from the industrial sector reached 243.6 billion yuan (US$29.3 billion) in the first five months, a year-on-year increase of 20.3 per cent or 0.9 percentage points higher than the first four months.

"The excellent tax revenue situation was mainly a result of the country's relatively sound economic development so far this year,'' said Zhang Peisen, a senior researcher at the Taxation Research Institute.

The country continued to carry out a pro-active fiscal policy and increase investment.

As a result, economic efficiency continued to improve, helping expand tax sources, Zhang said.

During the first five months of this year, fixed assets investment rose year-on-year by 31.7 per cent to 1,057.8 billion yuan (US$127.4 billion).

The large amount of fixed assets investment fuelled the growth of the industrial sector to a large extent.

The government's efforts to increase tax collection also helped, he said.

The country's economy will continue to grow at a higher rate in the remaining months of this year, despite the SARS outbreak, Zhang said.

This will help China's tax revenue grow at a faster speed, because the sound economic development is expected to contribute about 60 per cent to the total tax revenue this year, he said.

The government will also continue to increase tax collection this year, which is expected to contribute more than 30 per cent to the total tax revenue, Zhang said.

The government has said it will increase its tax-evasion investigations.

This year's tax revenue is likely to grow by 13 per cent from last year's 12.1 per cent, he said.

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