Economic strength hinders fiscal revenue growth

BEIJING - China's fiscal revenue growth continued to slow in the first quarter, mainly as a result of the country's tempered economic expansion, structural tax reforms and sluggish import growth, the Ministry of Finance said Monday.

The nation's fiscal revenue grew 6.9 percent year-on-year to 3.2 trillion yuan ($513 billion) in the first quarter, slowing from the 14.7-percent rate seen in the same period last year, the ministry said in a statement.

In 2012, China's fiscal revenue saw a rise of 12.8 percent.

The ministry attributed the slower growth to the country's tepid economic strength, ongoing tax breaks, sluggish import growth and the high comparison base of last year.

China's gross domestic product growth unexpectedly slowed to 7.7 percent in the first quarter, after seeing a 7.9-percent expansion during the final quarter of 2012, data from the National Bureau of Statistics showed on Monday.

In the first three months, the central government collected 1.46 trillion yuan in fiscal revenue, down 0.2 percent year-on-year, while local governments saw fiscal revenue expand 13.7 percent to 1.74 trillion yuan on the back of robust transactions in the housing market, the ministry said.

Of the total fiscal revenue, tax income totalled 2.74 trillion yuan, up 6 percent from a year earlier, but the growth rate was down 4.3 percentage points from the same period in 2012.

Revenues from value-added taxes increased 5.2 percent to 694.3 billion yuan, while business duties went up 14 percent to 457.6 billion yuan.

Corporate income tax revenues gained 25.6 percent year-on-year to 520 billion yuan. Individual income tax revenues moved up 9 percent to 208.4 billion yuan.

Fiscal revenue in China includes taxes, administrative fees and other government income, including fines and earnings from State-owned assets.

The ministry forecast that fiscal revenue for the whole year will not see a notable growth due to the falling prices at factory gates and the country's decision to expand its value-added tax reform nationwide as part of efforts to further reduce burdens on businesses.

Meanwhile, the ministry said the country's fiscal spending climbed 12.1 percent year-on-year to 2.7 trillion yuan in the first quarter.

Spending on people's well-being saw steady increases, with money on education up 9.3 percent to 382 billion yuan and spending on healthcare and public health services up 22.2 percent to 158 billion yuan.

Central government spending on tax rebates and transfer payments given to local governments in the first three months totalled 1.24 trillion yuan, up 2.1 percent year on year, while local governments saw outlays rise 13.4 percent to 2.3 trillion yuan, the MOF data showed.