China’s fiscal revenue growth plummets
Beijing: China’s fiscal revenue rose much slower in August, while expenditure growth picked up over more proactive fiscal policies, official data showed on Tuesday.
Fiscal revenue increased 6.2 percent year on year to 967.1 billion yuan ($152 billion) in August, compared with a 12.5 percent rise in July, Xinhua reported citing figures from the ministry of finance.
Revenue in the first eight months reached 10.35 trillion yuan, up 7.4 percent year on year.
Meanwhile, fiscal spending in August jumped 25.9 percent to 1.28 trillion yuan, a faster growth than 24.1 percent in July. Combined spending in the first eight months expanded 14.8 percent to 10.29 trillion yuan.
The ministry attributed the slower revenue growth to falling producer prices and slumping imports, which reflected flagging domestic demand and led to lower income from taxes on companies and tariffs.
Structural tax reductions and fee cuts, aimed at supporting economic growth, also kept a lid on fiscal revenue growth.
Revenue from value-added taxes dropped 4.7 percent year on year in August, while that from corporate income taxes declined 15.4 percent and that from tariffs slipped 15.5 percent.
China’s producer price index, a measure of costs for goods at the factory gate, fell 5.9 percent year on year in August, widening from the 5.4 percent drop seen a month earlier and the lowest level since the end of 2009.
The country’s imports slumped 14.3 percent year on year in August, compared with July’s decrease of 8.6 percent.
China will continue to face great fiscal pressure for the rest of this year, the ministry said.
The government plans to raise the country’s budget deficit to 2.3 percent of GDP for 2015, up from last year’s target of 2.1 percent.
China’s economy posted seven percent growth year on year in the second quarter of 2015, unchanged from the first quarter, the lowest quarterly growth rate since 2009.