GUANGDONG Finance Minister Zeng Bingsheng yesterday announced a belt-tightening budget for 1995 although the Government registered a surplus last year. The Minister said better control over government expenditure was necessary despite the increase in revenue. Total expenditure in 1994 totalled 41.6 billion yuan (HK$38.1 billion), up 24.47 per cent. Revenue amounted to 44.3 billion yuan, including a rebate of value-added tax (VAT) which Guangdong received from Beijing last year. The VAT was a new tax introduced by Beijing last year to replace the industrial and commercial tax. The central treasury receives 75 per cent of VAT revenue with the remaining 25 per cent going to the regional Government. However, Beijing has promised to compensate the regions for lost tax revenue, in the form of rebates, if their tax income in 1994 was lower than the previous year. Mr Zeng yesterday told the Congress that the Government's revenue increase last year was a result of a strengthening of tax collection and introduction of personal income tax. He warned that losses by state enterprises remained serious and indicated that natural disasters were costing the Government dearly. Losses by state enterprises jumped 96.1 per cent and reached 1.36 billion yuan. In addition, they owed the Government 337 million yuan in taxes, up 50.1 per cent from 1993. Compensation and repairs for natural disasters last year cost the Government more than 800 million yuan. Although Guangdong Governor Zhu Senlin claimed there had been a 34 per cent reduction in government establishments in 1994, growth in administrative expenses was a major factor behind the budget increase last year. An increase of 36.5 per cent (5.7 billion yuan) in administrative expenses was reported last year. According to Mr Zeng, tax revenues from virtually all sectors are expected to increase in 1995. Subsidies to ailing state enterprises will total only 1.5 billion yuan, 13.8 per cent down from last year.