Fiscal revenue up 24.8pc to record
The mainland's fiscal revenue jumped 24.8 per cent to a record high of 10.37 trillion yuan (HK$12.7 trillion) last year, continuing to outpace growth in economic output and household incomes.
Fiscal spending was 10.89 trillion yuan, a rise of 21.2 per cent from 2010, leaving the country with a fiscal deficit of 519 billion yuan, lower than the budgeted 900 billion yuan, the Ministry of Finance said yesterday.
Fiscal revenue grew three times as fast as the 8 per cent the ministry projected in its budget in March.
By comparison, the mainland's gross domestic product grew by 9.2 per cent last year, according to the National Bureau of Statistics, while urban residents' disposable income grew by 14.1 per cent in nominal terms, but by just 8.4 per cent after accounting for inflation.
The ministry said the unexpectedly high growth in revenue was due to relatively fast economic growth, price increases, surging corporate income tax receipts and a move to bring non-budget funds under its budgetary management.
The sharp revenue growth and the substantially narrower deficit give more weight to arguments that the government should further cut taxes to help struggling small and medium-sized enterprises (SMEs) and give handouts to people with low incomes or increase spending on education, housing, medical services and social welfare to help narrow the yawning income gap.
Fiscal revenue has grown faster than GDP and household incomes for years.
Professor Ma Guoxian, a taxation expert and director of the Public Policy Research Centre at the Shanghai University of Finance and Economics, said more fiscal revenue for government meant a smaller slice of the economic cake for businesses and households.
Haibin Zhu, chief China economist with JP Morgan Chase Bank in Hong Kong, said the sharp increase in fiscal revenue buttressed the belief the mainland needed to revamp its fiscal system and tax structure to make growth more sustainable.
'The government should restructure the taxation system to help restructure the economy to shift growth away from overreliance on capital investment and exports and base it more on domestic consumption,' Zhu said.
He said the sharp growth in fiscal revenue was likely to intensify calls from the business sector for the government to adopt a more stimulatory fiscal policy and for tax cuts for SMEs, most of which are export-oriented manufacturers struggling with sluggish growth in the United States and a euro zone suffering from a debt crisis.
The central government's fiscal revenue reached 5.13 trillion yuan last year, up 20.8 per cent, while local governments collected 5.24 trillion yuan, up 29.1 per cent, the ministry said in a statement on its website.
Tax revenue rose 22.6 per cent year on year to 8.97 trillion yuan last year, and non-tax revenue surged 41.7 per cent to 1.4 trillion yuan, the ministry said.
Corporate income tax receipts rose 30.5 per cent from a year earlier to 1.68 trillion yuan, it said.
Growth rate of fiscal revenue from 2009 to 2010, more than double the 10.3 per cent GDP grew in that period. The trend continued in 2011