Cut tax to stimulate economy

To unleash new forces for growth, the government should lessen the tax burden, said an article in the 21st Century Business Herald (excerpts below).

The Ministry of Finance announced that the government's overall tax revenue in the first half of this year was 5.93 trillion yuan ($941 billion), an increase of 7.9 percent year-on-year, a rate faster than GDP growth.

Both personal income tax and real estate transaction tax rose steeply despite inflation and commodity price hikes.

The real value of income actually shrinks because of tax and the costly payments for social insurance.

Similar financial burdens also exist for private enterprises because of heavy taxes, administration fees and difficulty in obtaining loans.

If China really wants to boost its economy by innovation, consumption and competition, it should relieve this financial burden on citizens and enterprises by cutting taxes.