Affluent east tops the list, contributing 2.1 trillion yuan to record 3 trillion total The State Administration of Taxation released a breakdown of tax revenue yesterday that showed income from corporate tax grew 35 per cent last year, largely due to a 38.1 per cent rise in profits in 2004. State Administration of Taxation commissioner Xie Xuren said in Beijing that revenue from value-added tax increased 19.8 per cent. Total tax revenue hit a record 3.0866 trillion yuan last year, up 20 per cent. Revenues from domestic value-added tax, consumption tax and sales tax accounted for 49.5 per cent of the 514.8 billion yuan increase, while revenues from income tax paid by individuals and domestic and overseas-funded firms contributed 34.8 per cent of the revenue growth. Tax revenues from the affluent east coast were 2.1834 trillion yuan, up 19.2 per cent, and comprised 70.7 per cent of the national total. Revenues from central China stood at 481.7 billion yuan, up 22.4 per cent and accounting for 15.6 per cent of the total, while the poorer western regions registered 421.5 billion yuan in tax revenues, up 21.7 per cent and accounting for 13.7 per cent of the total. Wang Li , Mr Xie's deputy, said the government was considering using taxation as a tool to curb the development of luxury residential housing on the mainland. 'The government will work out policy measures to curb the development of luxury residences ... and those merely for investment and speculation,' Mr Wang said. He said the tax authority was also considering unifying the mainland's property and land taxes. Beijing imposes separate taxes, including an urban property tax, a general property tax and a land-use tax. Mr Wang said the system created confusion and problems. 'The State Administration of Taxation is conducting an active study and a pilot programme on the subject,' he said, but did not give a timetable for any change. Mr Wang said Beijing wanted to end preferential tax treatment for foreign-funded companies because it was not aligned with international practice and had had 'negative effects' on the domestic economy. 'There is an urgent need for integration of the enterprise laws for foreign enterprises and domestic enterprises,' Mr Wang said. Overseas-funded firms are taxed at the rate of 15 per cent, less than half the 33 per cent paid by their domestic counterparts. There has been debate among government departments on the need and the timing of the plan to merge corporate tax rates for overseas and domestic enterprises. Taxation and fiscal departments favour an earlier merger, while the Ministry of Commerce, which is responsible for attracting overseas investment, and regional governments argue that such a move would affect flow of capital into the country, the world's largest recipient of foreign direct investment. The authority said it would intensify its fight against tax evasion by launching more investigations this year, focusing on real estate companies, foreign-funded firms and the country's rich, said another deputy commissioner, Cui Junhui . Mr Cui said the administration's special tax probes would also target coal, manufacturing, transport, entertainment, insurance and telecommunications. Last year's tax evasion crackdown recovered more than 36 billion owed to state coffers, Mr Cui said.