Tax Revenue Surges Far Beyond Forecast

Tax collections from China's booming economy surged far beyond the 2005 forecast last year, rising 20 percent to a record 3,087 billion yuan (US$382 billion), government figures showed.

It is the first time that the nation's tax revenues exceeded 3 trillion yuan.

The government had budgeted for a rise of just 11 percent to 2.93 trillion yuan, leaving a 2005 deficit of 300 billion yuan.

Although the State Administration of Taxation did not say what the final fiscal balance is, the unexpected rise in tax revenue was enough to wipe out most of the forecast deficit if spending was on target. The administration announced the figure on its Web site.

China's economy has been growing faster than 9 percent annually for more than two years.

While inflation can lift people into higher tax brackets, Chinese prices have risen little lately. November consumer prices were up just 1.3 percent from a year earlier.

The tax administration said its revenue figure excluded customs duties and agricultural tax.

The National People's Congress approved last week the scrapping of the decades-old agricultural tax, which farmers must pay regardless of their income. It raised only 1.5 billion yuan last year.

In another development, the Shenzhen Economic Daily reported that the Shenzhen local taxation bureau collected 37.93 billion yuan in tax revenues last year, an increase of 14.48 percent compared with a year earlier.

The newspaper said it is the first time that tax collections by the local taxation bureau averaged more than 100 million yuan a day.