Slowdown prompts calls for more funding

Updated: 2013-07-16 07:13

By Wei Tian (China Daily)

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The revenues of Chinese governments slowed in the first half of the year, prompting experts to call for measures to revitalize the economy by delving into the nation's coffers.

China's fiscal revenue grew 7.5 percent year-on-year to 6.86 trillion yuan ($1.12 trillion) in the first six months of the year, according to data released by the Ministry of Finance on Monday.

In June alone, fiscal revenues at all government levels reached 1.24 trillion yuan, up 12.1 percent from a year earlier, said the ministry. The pace in the first half was 4.7 percentage points lower than the same period of last year and slightly lower than the country's economic growth of 7.6 percent in the first half of this year.

In the first half, the central government's fiscal revenues rose by only 1.5 percent compared with the same period last year to 3.23 trillion yuan, adding further difficulties in achieving the full-year target of 7 percent.

The ministry said revenues from value-added tax, consumption tax and tariffs have either declined sharply or registered slower growth during this period, contributing to the slower growth in central fiscal revenues.

In the meantime, local governments saw their fiscal revenues for the first six months expand at a faster pace of 13.5 percent from a year earlier to 3.63 trillion yuan, driven up mainly by rising income from sharp increases in housing transactions, as well as more income from VAT, which used to be a tax source for central government.

"In the second half, due to a slowdown in the economy, more efforts to cut taxes and a possible downturn in property-related tax, the fiscal revenue growth will not be at a high level either," the Ministry of Finance said in an online statement, adding that it would be a challenging task to achieve the fiscal revenues target for 2013, which was budgeted at 7.5 percent.

Earlier this month, Premier Li Keqiang called for a revitalization of the stock in China's government fund and making better use of idle funds in supporting economic growth and improving people's livelihoods.

Shi Zhengwen, deputy director of the Finance and Tax Law Research Society at the China University of Political Science and Law, said there are still 3.23 trillion yuan in the nation's coffers and more than 1.4 trillion yuan in the fiscal account set up for special funds.

Jia Kang, director of the director of the Research Institute of Fiscal Science at the Ministry of Finance, said these idle funds were retained for urgent expenditures. "In principle, apart from a certain amount of stock, the others funds should be liquidized," he said.

Xinhua contributed to this story.