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China’s fiscal revenue last year rose by 10.7 per cent year on year (YoY) to hit 20.25 trillion yuan (about $3.19 trillion) in 2021, according to vice minister of finance Xu Hongcai, who recently said the fiscal revenue in 2021 nearly doubled from the 2012 figure of 11.73 trillion yuan. The central government collected 9.15 trillion yuan in revenue, up by 10.5 per cent YoY.
Local governments saw revenue up by 10.9 per cent to 11.1 trillion yuan in 2021.
“The recovery of economic growth and higher producer prices helped drive up fiscal revenues of central and local governments,” Xu was quoted as saying by official Chinese media.
China’s fiscal revenue last year rose by 10.7 per cent year on year (YoY) to hit 20.25 trillion yuan in 2021, according to vice minister of finance Xu Hongcai, who recently said the fiscal revenue in 2021 nearly doubled from the 2012 figure of 11.73 trillion yuan. The central government collected 9.15 trillion yuan in revenue, up by 10.5 per cent YoY.
China’s GDP expanded by 8.1 per cent YoY in 2021, surpassing the government’s target. “The steady growth of GDP has laid a sound foundation for the growth of the country’s fiscal revenue,” Xu said.
Buoyed by rising commodity prices, upstream enterprises reported significant revenue and profit increases last year, driving the growth of fiscal revenue, he said.
In the first 11 months of last year, the total profits of major industrial enterprises surged 38 per cent from a year earlier.
However, the fiscal revenue growth averaged 3.1 per cent over the past two years, lower than the country’s average gross domestic product (GDP) growth of 5.1 per cent for the two-year period.
The share of fiscal revenue in GDP kept falling during the period, which indicated fiscal support for economic and social development remained under relatively high pressure, Xu cautioned.
The country’s fiscal spending edged up by 0.3 per cent YoY to 24.63 trillion yuan in 2021.
China will take stronger measures to cut fees and taxes to support market entities this year with a combination of fiscal incentives, Xu said. The measures will be more precise and sustainable to meet the needs of market entities.
Incentives will be given to support the high-quality development of the manufacturing sector, such as tax deductions for research and development expenses of enterprises to aid technological advancement, Xu said.
The country will also extend the tax and fee cuts due at the end of 2021 for small, micro and individual businesses to further ease their operating pressure.
The central government will step up transfer payments to local governments to ensure sufficient funds for local tax and fee cuts, Xu said.
On the basis of 7.6 trillion yuan of tax and fee cuts over the 13th Five-Year Plan period (2016-2020), China cut another 1 trillion yuan in taxes and fees in 2021, which helped mitigate the impact of COVID-19 on market entities.
The country will set appropriate deficit and debt targets, guard against risks and enhance coordination between fiscal policies and monetary, employment, industrial, investment, consumption and regional policies, Xu added.
Fibre2Fashion News Desk (DS)
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