Slowdown bites into China's 2012 fiscal revenues

BEIJING - China's fiscal revenue growth slowed sharply in 2012 due to an economic downshift and tax breaks, the Ministry of Finance said Tuesday.

National fiscal revenues rose 12.8 percent year-on-year to 11.7 trillion yuan ($1.9 trillion), with the growth rate dropping 12.2 percentage points from a year earlier, the MOF said in a statement.

The ministry attributed the slowdown to a softening economy, weakening corporate profits, milder inflation and structural tax breaks.

Of the total fiscal revenues, tax revenues reached 10.1 trillion yuan, up 12.1 percent from a year earlier, but the growth rate was down 10.5 percentage points from the 2011 level.

Fiscal revenues in China include taxes, as well as administrative fees and other government income, such as fines and income from state-owned assets.

Revenues from value-added taxes increased 8.9 percent to 2.6 trillion yuan, while those from business taxes went up 15.1 percent to 1.6 trillion yuan.

In breakdown, business tax revenues in the property and construction sector jumped 11.6 percent and 18.6 percent, respectively, while those in the financial industry surged 32.7 percent due to increases in loan interest.

Corporate income tax revenues gained 17.2 percent year-on-year to 2 trillion yuan. Banks paid 41.9 percent more for income tax, while the income tax revenues of industrial enterprises inched up 2.6 percent, weighed on by slowing profits growth in 2012.

Individual income tax revenues dipped 3.9 percent to 582 billion yuan, affected by the government's move in September 2011 to raise the threshold at which individuals must pay income taxes from 2,000 yuan to 3,500 yuan.

On a quarterly basis, China's fiscal revenue growth recovered to 19.9 percent in the fourth quarter of 2012 from 14.7 percent in the first quarter, 10 percent in the second and 8.1 percent in the third quarter.

The fourth-quarter rebound was mainly caused by a low base in the same period of 2011, the MOF said.

 

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