BEIJING (Reuters) - China’s tax revenues in the first half of the year surged 29.6 percent from a year earlier to 5 trillion yuan ($773 billion), underscoring the government’s ability to deal with any fallout from piles of local government debt.
Tax revenue growth slowed from a 32.4 percent rise in the first quarter of this year.
Revenue from corporate income tax surged 38.3 percent in the first half while personal income tax climbed 35.4 percent and consumption tax rose 20.2 percent, the Ministry of Finance said in a statement on its website (www.mof.gov.cn).
Receipts from customs duties rose 32.1 percent and those from property tax rose 24.4 percent, the ministry said.
The ministry attributed the strong tax revenues in the January-June period to solid economic growth, rising corporate earnings as well as higher prices that boosted receipts.
Stringent tax collection also helped, it added.
China’s fast economic growth and hefty government revenues will help contain potential risks from swelling local government debt as a result of Beijing’s massive economic stimulus during the global financial crisis, analysts say.
The national auditor said last month that local governments had chalked up about 10.7 trillion yuan in debt as of the end of 2010, 4.97 trillion yuan of that being held by local government financing vehicles.
Last week, China reported a fiscal surplus of 1.25 trillion yuan in the first half as steady economic growth and rising prices lifted government revenues.
China’s economy, which grew a faster-than-expected 9.5 percent in the second quarter, is expected to retain much of its momentum in the coming quarters despite policy tightening, according to the latest Reuters poll. ($1 = 6.469 Yuan)
Reporting by Kevin Yao; Editing by Jacqueline Wong