China fis­cal rev­enue up 6.3pc in first two months

The Pak Banker - - 6BUSINESS -

BEI­JING: China's fis­cal rev­enue rose 6.3 per­cent year on year to 2.74 tril­lion yuan ($421.3 bil­lion) in the first two months of 2016, data from the Min­istry of Fi­nance showed on Wed­nes­day. The data came af­ter China's fis­cal rev­enue logged its slow­est pace since 1988 last year as the broader econ­omy slowed. In break­down, the cen­tral govern­ment col­lected 1.18 tril­lion yuan in fis­cal rev­enue, up 1.6 per­cent year on year, while lo­cal gov­ern­ments saw fis­cal rev­enue ex­pand 10 per­cent to 1.56 tril­lion yuan.

Thanks to ro­bust prop­erty trans­ac­tions in ma­jor cities, real es­tate busi­ness taxes went up 20.2 per­cent year on year to 116 bil­lion yuan. Re­source taxes plunged 24.8 per­cent due to slug­gish crude oil and coal prices.

Dur­ing the Jan­uary-Fe­bru­ary pe­riod, fis­cal spend­ing ex­panded 12 per­cent to 2.12 tril­lion yuan, with spend­ing on the af­ford­able hous­ing pro­gram surg­ing 30.7 per­cent.

To cush­ion the blow from sag­ging rev­enue growth and bal­ance the need for a proac­tive fis­cal pol­icy to sup­port growth, China plans to in­crease its deficit-to-GDP ra­tio to 3 per­cent this year from 2.3 per­cent last year. The rise of 0.7 per­cent in the ra­tio, based upon China's GDP, would pro­vide the govern­ment about 470 bil­lion yuan more to spend, pro­jected mainly to cover tax and fee re­duc­tions for en­ter­prises.

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