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Non-tax revenue jumps

Non-tax revenue in China surpassed the tax revenue during the first half of 2009 but there's still ways to go before things get comfortable, according to a report released by the Ministry of Finance (MOF) Monday.

The country's fiscal revenue registered 3.40 trillion yuan ($497.45 billion) from January to June, down 2.4 percent year-on-year, with tax revenue down 6 percent year-on-year. Meanwhile, non-tax revenue reached 444.61 billion yuan ($65.10 billion), up 31.4 percent year-on-year, according to the report.

The report indicated that the country's fiscal revenue has ended a downward trend and has begun to see an increase as of May. In June, the fiscal revenue growth rate jumped 19.6 percent from the previous year, hitting a record high this year.

However, MOF warned in the report that there lacks a solid foundation for sustainable fiscal growth.

The high growth of non-tax revenue, including substantial government hike of some fees, has played a vital role in the fiscal revenue jump in recent months, according to Zhao Xijun, deputy director of the School of Finance at the Renmin University of China.

In June, non-tax revenue rose 61.46 percent from a year earlier at 138.39 billion ($20.26 billion), while tax revenue only increased 12.21 percent at 548.36 billion ($80.29 billion).

In May, non-tax revenue growth climbed over 130 percent year-on-year, while tax revenue registered a negative growth, according to the MOF.

Major taxes, including value-added tax (VAT) and corporate tax still saw negative growth, which indicates enterprises' profits have not yet fully recovered, said Zhao.

VAT for the first half of this year decreased 3 percent from a year earlier, and the corporate income tax in the same period was down 13.8 percent year-on-year, says the report.

Zhao pointed out that the better performance of non-tax revenue wouldn't necessarily translate into fiscal revenue growth.

Non-tax revenue hikes are often spurred by temporary policies, which cannot be expected to last long, he explained.