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Slowdown erodes fiscal income
By Zhang Fengming |
February 17, 2009, Tuesday
|
Print Edition
Print Edition
CHINA'S fiscal revenue tumbled 17.1 percent in January from a year ago due to an economic slowdown, falling corporate profits, tax cuts and holidays, the finance ministry said yesterday.
The country saw a decline in its fiscal revenue to 613 billion yuan (US$90 billion) in January, the Ministry of Finance said on its Website yesterday.
Of the total revenue, tax income dived 16.7 percent to 563.9 billion yuan year-on-year. Corporate income and individual income taxes, business tax and tariffs also declined last month. The stamp duty on securities trading plunged 95.7 percent last month on a sluggish capital market. The 25-percent rise in export tax rebates to 63.43 billion yuan also ate into the country's fiscal revenue.
To redress the drop and to revive the economy the central government granted more tax rebates on exports and trim the VAT rate.
Since January, the State Administration of Taxation has shifted the production-based VAT to consumption. Under the consumption-based VAT, companies can save on their tax payments as the costs of buying equipment can be offset by tax deductions. The move is likely to see a drop of more than 120 billion yuan in corporate taxes this year.
The Lunar New Year holiday fell in January, one month earlier than in previous years and five working days were lost compared to a year ago, the ministry said.
The country saw a decline in its fiscal revenue to 613 billion yuan (US$90 billion) in January, the Ministry of Finance said on its Website yesterday.
Of the total revenue, tax income dived 16.7 percent to 563.9 billion yuan year-on-year. Corporate income and individual income taxes, business tax and tariffs also declined last month. The stamp duty on securities trading plunged 95.7 percent last month on a sluggish capital market. The 25-percent rise in export tax rebates to 63.43 billion yuan also ate into the country's fiscal revenue.
To redress the drop and to revive the economy the central government granted more tax rebates on exports and trim the VAT rate.
Since January, the State Administration of Taxation has shifted the production-based VAT to consumption. Under the consumption-based VAT, companies can save on their tax payments as the costs of buying equipment can be offset by tax deductions. The move is likely to see a drop of more than 120 billion yuan in corporate taxes this year.
The Lunar New Year holiday fell in January, one month earlier than in previous years and five working days were lost compared to a year ago, the ministry said.
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