Fast-Rising Chinese Tax Revenues Prompt Backlash

Posted September 20th, 2011 at 3:15 am (UTC-5)
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Chinese media report growing public anger over taxes after reports of explosive growth in government income.

The Shanghai Daily says Tuesday that debate is raging on the Internet, with many writers pointing to a 2009 study by Forbes magazine that claims China taxes its people more heavily than any country except France.

The Finance Ministry reported last week that government revenue for August was more than 34 percent higher than in the same month last year. That followed increases of about 27 percent in the two previous months.

The Global Times newspaper quotes an economic expert as saying the staggering growth of government income could prompt a public outcry.

The government attributes the revenue increase to a combination of rapid economic growth and inflation. It says the August figures were exaggerated by a one-time settlement of outstanding oil taxes.

Nevertheless, Global Times reports that revenues — gleaned mainly from various kinds of taxes — are going up much faster than personal incomes, which are rising at less than 10 percent a year.

Analyst Liu Huan told the newspaper that because most Chinese have small disposable incomes, even a small increase in taxes can seem unbearable. The analyst said many Chinese do not see their taxes spent in ways that benefit them.

Shanghai Daily says revenue growth may begin to slow because of an increase in the minimum level for paying personal income tax that will remove millions of people from the tax roles.

The Finance Ministry notes that as revenues go up, the government is dramatically increasing its spending on education, social security, employment supports and health care.

Total revenue for this year is projected to top $1.57 trillion.