In 2005, the government's actual tax income far exceeded the original expectation, reaching 113% of the budget amount, due mainly to the exceptional 5.7% economic growth in 2004. With the economic growth dropping to 4.1% in 2005, the expected interference of political factors in 2006, and the slackening consumer confidence and investment willingness, government's income in 2006 may not be able to repeat the good performance in 2005. In the aspect of tax reform, although the law for the minimum tax burden has been enacted and put into practice from 2006, its contribution to tax income will be limited, due to due to the effect of the principle of trust protection and the exclusion of overseas income. Despite breakthrough in the elimination of free-tax privilege of servicemen and teachers, the principle to compensate the new tax burden will also restrict the increase in tax income from the change. For the elimination of unreasonable tax reduction or exemption, the government has proposed some principles without concrete actions. The policy, therefore, is unlikely to contribute to tax income in the short term.

Looking ahead, the government's incomes will continue to record moderate growth, but the heavy debt burden will lead to a rigid structure in its outlays. How to control further debt growth via stringent financial discipline will be critical for the improvement for the government's finance.