Experts warn on rising non-tax revenue

Experts are warning of an increase in non-tax revenue by local governments to compensate for declining income from tax, which they say will erode the country's efforts in structural tax reduction.

Figures from the Ministry of Finance on Monday showed tax revenue growth fell by 18.8 percentage points in the first three quarters of the year from the same period last year, but non-tax revenue surged by 27.1 percent.

Jia Kang, director of the fiscal science research center with the Finance Ministry, said local governments, facing sluggish tax income during the economic slowdown, are looking for new sources of revenue to meet spending goals set at the start of the year.

Therefore, non-tax revenue, with flexibility in assessment and supervision, has become a major "gold mine".

In the first three quarters of the year, Tianjin and Anhui have seen their non-tax revenue grow 30 percentage points faster than tax revenue, with other areas, such as Guangdong and Jiangsu, reporting much faster growth in non-tax revenue than for tax revenue.

More than a third of the cities in Anhui province had non-tax revenue accounting for more than 30 percent of their total revenue by the end of September, the tax bureau says.

Low-tax items and non-tax revenue have become the major source of income for China's local governments, said Li Xuesong, a researcher with the Chinese Academy of Social Sciences.

Once there is a sharp decline in fiscal revenue, these items would see overcharging, resulting in unreasonable fines and confiscation. More attention should be paid to this, Li said