China records $173 billion fiscal surplus

August 7th, 2008 - 6:16 pm ICT by IANS  

Beijing, Aug 7 (Xinhua) China’s fiscal surplus hit 1.19 trillion yuan ($173 billion) in the first half of the current year, the finance ministry said Thursday. Statistics issued by the ministry showed the country’s budget revenue totalled 3.48 trillion yuan ($460 billion) from January to June, up 33.27 percent compared with the corresponding period last year.

The increase of fiscal revenue was attributed to rising corporate income tax and import turnover tax, economic experts said.

Corporate income tax contributed to the state revenue, 791.3 billion yuan in the first half, up 41.5 percent. This was due to enterprises pre-paying income tax according to last year’s strong profits, said Ma Haitao, a professor at the Beijing-based Central University of Finance and Economics.

“Rising imports also drove up corporate income tax,” said Zhu Qing, a Renmin University of China professor.

“Because of the appreciation of the renminbi, the first half saw imports valued at 567.6 billion U.S. dollars, up 30.6 percent year on year.”

In the first half, domestic consumption tax reached 134.6 billion yuan, up 18.4 percent, and sales tax was 405.1 billion yuan, up 25.6 percent year-on-year.

In the backdrop of the fiscal surplus, experts proposed adoption of a tax reduction policy to maintain the development of both the macro economy and enterprises.

However, Chinese Academy of Social Sciences analyst Yang Zhiyong said that in the second half fiscal expenditure was expected to increase as a large amount of capital would go to post-quake reconstruction, education and medical care, among other things.

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