Soaring Chinese tax revenues in 2011 pare worries over local debt

CHINA’S tax revenues in the first half of the year surged 29.6 per cent from a year earlier to five trillion yuan (£470bn), underscoring the government’s ability to deal with any fallout from piles of local government debt.

Tax revenue growth slowed from a 32.4 per cent rise in the first quarter of this year. Revenue from corporate income tax surged 38.3 per cent in the first half while personal income tax climbed 35.4 per cent and consumption tax rose 20.2 per cent, the Ministry of Finance said.

Receipts from customs duties rose 32.1 per cent and those from property tax rose 24.4 per cent, the ministry said. The ministry attributed the strong tax revenues to solid economic growth, rising corporate earnings as well as higher prices that boosted receipts.