China's fiscal revenue grows 4.5% in 2016
The Dollar Business Bureau
China's fiscal revenue grew at its slowest pace in the last three years, dragged down by the introduction of value added tax and downward economic pressures in the Chinese economy.
The fiscal revenue growth remained a modest 4.5% year-on-year in 2016 to 15.96 trillion yuan ($2.33 trillion), as against 8.4% in 2015 and 8.6% in 2014.
The modest growth was a result of the recently-introduced value-added tax, the Chinese ministry of finance said in a statement.
Even though China’s economy seemed to be stabilising in the last quarter of the previous fiscal, the growth in fixed-asset investment and industrial output remained contracted, leading to a compressed fiscal revenue growth.
The Chinese central government collected 7.24 trillion yuan in fiscal revenue, up 4.7% year-on-year, while local governments earned 8.72 trillion yuan, up 4.2% year-on-year.
Value-added tax collection jumped 30.9% year-on-year to 4.07 trillion yuan last year, while business tax declined as much as 40.4% to 1.15 trillion yuan.
Consumption tax shrank 3.1% due to a fall in the output and sales of refined oil and tobacco.
Fiscal expenditure grew 6.4% year-on-year to 18.78 trillion yuan, thereby leaving a fiscal deficit of 2.829 trillion yuan.
To withhold the economic slowdown, the Chinese government put in place proactive fiscal policies to ensure adequate spending.
The finance ministry statement said China's land transfer revenue register a 15.1% year-on-year growth to 3.75 trillion yuan, while land transfer expenditure also jumped 16.8% to 3.84 trillion yuan.