Strong fiscal revenue growth has long been deemed as solid evidence of the Chinese economy's resilience as last year's double-digit increase in fiscal revenue clearly shows.

But if China is to boost consumer-led growth by improving income distribution, policymakers must take another examination at the current rise in fiscal revenues.

Yes, more taxes do enable the government to better finance public investment and expand public services. But a bigger tax burden can also undermine the country's endeavor to change its growth model by relying more on domestic spending than on investment and export for growth.

Financial Minister Xie Xuren announced on Sunday that the country's 2009 fiscal revenue was estimated at 6.85 trillion yuan ($1 trillion), up 11.7 percent year on year.

During most of 2009, tax and financial authorities had repeatedly expressed their worries about how to meet the fiscal revenue growth target of 8 percent that was regarded as necessary for budgetary concerns.

As the worst global recession in more than 70 years slowed China's economic growth to 6.1 percent in the first quarter of 2009, the lowest in a decade, the country's fiscal revenue shrank 8.3 percent over the same period last year.

Yet, the astounding rebound of the Chinese economy on the back of a massive government-led stimulus package and unprecedented credit support has since supported the about-face in revenue growth.

Now, with higher-than-expected revenue growth, the Chinese government is well positioned to not only fulfill its promise of the two-year, 4-trillion-yuan stimulus package but also increase public expenditure on social welfare without inviting a big budget deficit.

In sharp contrast to difficulties by some developed countries to rein in their soaring budget deficits, the Chinese government's fiscal prudence looks commendable.

Nevertheless, in the mean time, Chinese policymakers should also remember that the more freedom the government has to steer the economy, the less money will be left in the pockets of numerous Chinese companies and consumers.

Although income tax contributes to only a small part of the fiscal revenue, the authorities should find a way to reduce the tax burden for individuals. If domestic consumption is to become a more important driving force behind economic growth, everyone's total income must be further raised proportionally with the country's gross domestic product.

Unfortunately, as people's average income level is unlikely to increase by double digits, their total purchasing power as a share of the GDP will continue to fall.

Chinese policymakers should put an end to that trend by striking a better balance between fiscal revenue and income growth.

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