2010-08-10 13:30

The growth of China's government revenue is represented not only by the sharp increase of taxation and various extra-budgetary revenues, but also by the "gray income" or "hidden benefit" of government officials.

Although the actual income of government officials is not that high, the investigation shows that their "gray income" hit 5.4 trillion yuan ($797.1 billion) in 2009, far more than the total national fiscal revenue last year, which stood at merely 3.6 trillion yuan. Moreover, the growth of "gray income" is faster than that of the Gross Domestic Product (GDP).

A study by Wang Xiaolu, deputy director of the National Economic Research Institute affiliated with the China Reform Foundation, was included in a report on China's income reform carried in the latest edition of China News Weekly.

According to the study, official's "gray income," referring to legal income people do not disclose, and illegal income, such as bribes, unreasonable monopolistic revenues of some resource-based and monopoly industries and corruption of some government officials, is not included in the levy of personal income tax.

Additionally, Wang also pointed out that power, without effective restriction and supervision, would lead to the pursuit of economic benefit and result in abuse and usurpation of social wealth, inequality of income distribution and even social conflict. Wang's study on the "gray income" from 2005 to 2008 showed that the growth of "gray income" was faster than that of GDP. The income gap has been further widened, with the rich taking away most of social wealth.