Data released by the Ministry of Finance on the 19th showed that China’s total tax revenue reached 5.002843 trillion yuan from January to June, rising 29.6% year on year. Figures from the National Bureau of Statistics indicated that China’s GDP hit 20.4459 trillion yuan in the first half of the year, growing 9.6% year on year in comparable prices. Accordingly, the growth rate of tax revenue was 3.08 times that of GDP in the period.

 

Notably, land value-added tax logged 120.308 billion yuan in the first half of the year, a year-on-year increase of 91.1%. The tax base of land value-added tax refers to the total land value-added gains obtained by taxpayers from selling new and second-hand residential properties. The Ministry of Finance stated that the rapid growth was mainly driven by strengthened administration over prepayment and liquidation of land value-added tax by tax authorities.

 

Since May 2010, local authorities have adjusted the prepayment rates. Excluding indemnificatory housing, the rate is no less than 2% in eastern provinces, no less than 1.5% in central and northeastern provinces, and no less than 1% in western provinces. The revenue-boosting effect of such policy adjustments started to manifest in the second half of last year, leading to a relatively low comparison base in the first half of last year.

 

Property tax revenue stood at 56.935 billion yuan in the first half of the year, up 24.4% year on year, accounting for 1.1% of total tax revenue. Its tax base covers the original value of self-used properties owned by enterprises and total rental income from leased premises, and its growth is determined by the stock of owned properties and the rise in housing rental prices. The Ministry of Finance attributed its robust growth mainly to the rapid expansion of office and commercial premises stock and the climbing housing rental rates.

 

Among real estate-related taxes, deed tax revenue amounted to 154.492 billion yuan, rising 27.5% year on year, whose tax base is roughly equivalent to the total transaction volume of land and real estate. The growth was mainly fueled by buoyant real estate development investment and active land market transactions.

 

In terms of major tax categories, domestic value-added tax (VAT) rose 19.7% year on year, with strong growth seen in building materials, crude oil and refined oil sectors. Domestic consumption tax reached 376.075 billion yuan, up 20.2%, driven by robust increases in taxes on luxury jewelry, alcohol and cigarettes.

 

In addition, business tax grew 24.4%, corporate income tax 38.3%, individual income tax 35.4%, customs duties 32.1%, and import VAT and consumption tax 37.1% year on year. Import-related tax revenue took up 17% of the total tax revenue.