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As their profits soar, foreign banks have become major new taxpayers in Shanghai, a financial center in China, according to the local taxation administration.
Latest statistics from the administration show that in the first half of this year, the business tax paid by these banks reached 98.52 million yuan (11.87 million US dollars), nearly three times that of the same period last year.
Meanwhile, their income tax totaled 120.18 million yuan (14.18 million dollars), a sharp increase from 32.33 million yuan (3.9 million dollars) during the January-June period last year.
Since China's entry into the World Trade Organization, the People's Bank of China, the central bank, has eased controls on the operation of foreign financial institutions in China. Foreign banks in Shanghai now provide more services and are diversifying their loans.
Some banks, as their terms for preferential tax policies fall due, have begun to contribute to China's rising tax revenue.
Being one of the first foreign banks allowed to deal in RMB business in China, Citibank registered an income of 250 million yuan (30.12 million dollars) from its RMB business in 2001. In the first half of this year, its business tax increased by 54.1 percent over the same period last year.
So far, Shanghai is home to over 50 profit-making foreign financial institutions with total assets worth 20 billion US dollars.
(Xinhua News Agency July 29, 2002)
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