(Yicai Global) July 17 –– China's aim to cut levies by CNY800 billion (USD119.5 billion) this year is not showing in the public tax revenue yet, which soared more than the economic growth for the first six months of the year.

Tax revenue reached CNY9.2 trillion in the first half of the year, up 14 percent from the year before, China's finance ministry said. This income grew much faster than the 6.8 rate of the economic growth during the same period, which was against everyone's expectations, a duties expert told Yicai Global. 

The government's accelerated tax revenue just means that the policy shift will show after a delay, Jiao Ruijin, deputy secretary-general at the Chinese Tax Institute said, adding that the growth rate of duties slowed down to 8 percent in June from double-digit increase in the months before that.

Two tax cuts should already show. On May 1, the government decreased value-added tax by 1 percentage point in two categories, down to 16 percent and 10 percent, in order to lighten the financial burden of individuals and businesses.

Secondly, the reform of individual income tax started last month. This includes raising the threshold for taxable income, and introducing new categories for deductions to lighten the tax burden on low- and medium-income workers. 

The rest of the planned CNY800 billion cut will take effect in the coming months until the end of this year, this year's national budget report shows. In addition to the two already active policy shifts, the reform will also expand the scope of small and micro-businesses that can enjoy a 50 percent break in income tax.

China started its supply-side reform in 2015 to increase the competitiveness of its companies. The policy change replaced business tax with value-added tax in 2016 in order to remove double taxation and ease upstream firms' ability to turn a profit.

Editor: Emmi Laine