The Guangdong Government, the richest among China's 31 provinces, is expecting to have to surrender between two billion yuan (HK$1.88 billion) and three billion yuan in corporate tax revenue this year under a Beijing plan to impose a new tax-sharing policy on local government revenues, according to provincial Governor Lu Ruihua. Beijing has ordered provincial governments to pay half their corporate tax revenue growth to the central Government to finance development in the less-advanced provinces in western China. 'We are not required to split all of our profit tax revenues with the central Government, only the part which rises above the previous year's level,' Mr Lu said. Although the Guangdong Government would lose billions of yuan in tax revenue, Mr Lu said it fully supported Beijing's decision to help develop western China. 'I think it's very reasonable for richer people to pay more tax,' he said. He said Guangdong recorded more than 40 per cent growth in profit tax revenue last year, but declined to give specific figures. The province recorded 1.05 trillion yuan in gross domestic product last year, a rise of 10.9 per cent, ahead of the country's 7.3 per cent average growth rate. Meanwhile, Mr Lu said Guangdong was restructuring its power industry to increase cost-effectiveness. The restructuring had helped cut prices to 0.89 yuan per kilowatt-hour last year, down from between 1.5 yuan and two yuan in rural areas a year earlier. Mr Lu said the provincial Government aimed for a further cut of 0.10 yuan this year.
