Hot property market fires up tax revenue

Power companies and property developers were seeing rapid growth in their revenue and corporate tax payment, due to increased power consumption during the summer heat wave, as well as substantial property sales.

Developers contributed to half the increment in the corporate tax, the result of a 30 percent yearly increase in property sales, the finance ministry said.

Companies' improved performances stemmed partly from tax reforms that eased their tax burden, Bai said. Finance Ministry data showed business taxes dropped by two-thirds for the transportation sector on average and by nearly one-third for commercial service companies after a reform to replace business tax with value-added tax to avoid duplicate taxation was expanded nationwide in August.

Measures launched earlier this year to curb housing price hikes by heavily taxing property transactions also helped lift tax revenue.

Propelled by strong demand in the housing market and new levies on property sales, growth in business sales tax and contract tax from property transactions accelerated 37.6 percentage points and 40.4 percentage points respectively in the first nine months from the same period last year.

During the same period, growth in personal income tax picked up by 10.8 percent, accelerating by 19.2 percentage points compared with last year's decline following efforts to cut the payroll tax. Levies on property transfer income, which grew 35.2 percent, played a key role in driving up the revenue.

Meanwhile, revenue from tariffs and housing taxes levied on property owners experienced a decline.

Qiu Xiaoxiong, deputy head of the State Administration of Taxation, called at a recent conference for further strengthening of tax collection "to guarantee a stable growth in tax revenue."