China today said its fiscal revenue growth plunged to 5.8 per cent last year from 8.6 per cent in 2014...
China today said its fiscal revenue growth plunged to 5.8 per cent last year from 8.6 per cent in 2014, the slowest pace since 1988, in yet another sign of the painful slowdown of the world’s second largest economy.
Fiscal revenue rose 5.8 per cent year on year to 15.22 trillion yuan (USD 2.3 trillion), slowing from the 8.6 per cent rise seen in 2014, the Ministry of Finance said.
The expansion was also below the 7.3 per cent fiscal income target set for the year, state-run Xinhua news agency reported.
The ministry attributed the sluggishness to slumping global commodity prices triggering a fall in import taxes, and slowing industrial activity, the report said.
Weak performances by companies and structural tax reductions also played a role, it noted.
China’s economy grew by 6.9 per cent year on year in 2015, its lowest annual expansion since 1990, sparking global concerns over the health of the world’s second largest economy and its impact on investors as the Communist giant embarked on economic reforms.
The growth rate released earlier this month, showed that China’s GDP growth moderated to 6.8 per cent for the fourth quarter, the lowest quarterly rate since the global financial crisis in 2009, and 6.9 per cent for 2015.
The 6.9 per cent growth rate is the slowest in the country since the 3.8 per cent in 1990, a year after the bloody Tiananmen Square crackdown rocked the country and isolated it internationally.
Chinese Premier Li Keqiang last year had said that the Chinese government targeted an annual economic growth of around seven per cent for 2015.
The Ministry of Finance said the central government collected 6.92 trillion yuan in fiscal revenue in 2015, up 7 per cent year on year, while local governments saw fiscal revenue expand 4.8 per cent to 8.3 trillion yuan.
Weighed down by tepid industrial activity, national value-added tax edged up just 0.8 per cent to 3.11 trillion yuan.
Thanks to the warming property market, real estate business tax went up 8.5 per cent year on year to 610.4 billion yuan. Stock trading stamp tax came in at 3.8 times the volume in 2014 on the back of robust trading in the first half of the year, the report said.
Friday’s data also showed national fiscal spending expanded 13.17 per cent from a year ago to 17.58 trillion yuan, with spending on energy-saving and environmental protection surging 26.2 per cent.
Authorities have stressed the importance of a proactive fiscal policy to help arrest the slowdown.
After witnessing rapid growth for more decades, China’s economy has experienced a painful slowdown in the last two years.
Since last year, the government has also been vocal about the slowdown saying the economy has entered a “new normal” in view of the transition from a state-led investment and manufacturing growth to one more dependent on services and consumption.