China's tax revenue rose 20.7 per cent during the first 10 months of this year compared with a year ago, according to Xie Xuren, director of the State Administration of Taxation.

Tax revenue stood at 1.71 trillion yuan (US$206.4 billion) during the January-October period, accounting for 90.6 per cent of the year's budget revenue, Xie said.

Tax expert Zhang Peisen with the Taxation Research Institute said the strong tax revenue situation was mainly because of the country's sound economic development this year.

China's economy rose a year-on-year 8.5 per cent during the first nine months, the National Bureau of Statistics said earlier.

The government's efforts to beef up tax collection also helped, Zhang said.

"China's tax revenue for 2003 is likely to grow 13 per cent over last year despite the SARS outbreak and the US-led war on Iraq," he said.

Tax revenue rose a year-on-year 12.1 per cent to 1.70 trillion yuan (US$204 billion) in 2002.

"China will also witness faster growth in private investment this year," Zhang said, adding that foreign direct investment will also grow steadily.

A number of "hot consumption areas" such as housing, cars and education will continue to have great effect on consumption, he said.

Sound economic development, the improvement in companies' efficiency and the expiry of tax breaks enjoyed by some companies will lay a solid foundation for the country's tax revenue growth, he said.

Meanwhile, the country will continue to beef up efforts to collect tax by fighting tax evasion, he said.

Ni Hongri, a senior researcher with the State Council's Development Research Centre, said: "If there were no unexpected events such as SARS or floods during the rest of this year, tax revenue is expected to grow between 15 per cent and 20 per cent."

According to Zhang, the Chinese economy will continue to grow at a rapid pace in 2004 and 2005, the last two years of the country's 10th Five-Year Plan (2001-05).

China is expected to make more progress in aspects such as economic structuring adjustment, financial mechanism reform and "fees-for-tax" reform in rural areas during the two years.

The government should speed up tax reforms, especially in enterprise and personal income tax and value-added tax.

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