Beijing will cut business tax for the financial and insurance industry to 5 per cent from 8 per cent in the next three years. Xinhua quoted the Ministry of Finance as saying yesterday that the tax rate was lowered to 7 per cent from 8 per cent from January 1 this year. It will be cut further to 6 per cent on January 1 next year and to 5 per cent on January 1, 2003. Mainland analysts say the cuts will boost the expansion of financial and insurance businesses in China, according to Xinhua. Beijing hopes to groom a stronger domestic financial and insurance industry ahead of China's entry into the World Trade Organisation this year. Analysts said the tax cut was in line with Beijing's general move to lower tariffs. However, the tax cut may reduce government revenue. China's tax revenue surged 30.9 per cent year on year in the first quarter this year to 305.83 billion yuan (about HK$286.59 billion), the China Securities News said.