Big payday for govt in Feb

08:35, March 16, 2010      

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China's fiscal revenue rose 20.4 percent year-on-year to total 494.50 billion yuan ($72.43 billion) in February, the Ministry of Finance (MOF) announced over the weekend.

However, the figure plunged 42.9 percent from January when fiscal revenue reached 865.87 billion yuan ($126.83 billion), an increase of 41.2 percent over January 2009.

The big fluctuations in fiscal revenue over the first two months were mainly owing to the different timing of the Chinese Lunar New Year Holiday, which fell in February this year compared with January last year, the MOF said in a statement posted on its website.

The first two months as a whole saw a 32.9 percent increase in fiscal revenue over the same period last year.

The increase in fiscal revenue was mostly driven by economic growth, taking out non-comparable factors, said Su Ming, deputy director of the Research Institute for Fiscal Science at MOF.

The country has been on a strong recovery track, which has been reflected by major economic data released recently. For the combined January-February period, industrial production rose 20.7 percent, urban fixed-asset investment increased 26.6 percent, and retail sales jumped 17.9 percent, the National Bureau of Statistics reported Thursday. General trade surged 52.1 percent in the first two months, the General Administration of Customs said Wednesday.

The increases spurred relatively rapid growth in revenue from business tax, value-added tax (VAT) and consumption tax on import goods, the MOF said in the statement.

In the first two months the business tax increased by 41.9 percent, and the VAT and consumption tax on imported goods skyrocketed 52.4 percent, according to the MOF.

An 86 percent jump in domestic consumption tax revenue in January- February also contributed to the substantial increase in fiscal revenue. The launch of taxes on petroleum products early last year and a hike of taxes on tobacco products since the middle of last year were primary contributors to the surging consumption tax, the MOF said.

The MOF also attributed the surge to a low base in the first several months of last year when the country was hit by the global financial crisis.

The country's fiscal revenue is expected to see a substantial increase in the first several months of this year given the low bases last year, while seeing a decline in the increase rate starting in May, since fiscal revenue began to rise in May last year, the MOF forecast.

Su is confident about the country's economic growth, which he believes can be seen in a rise in revenue from corporate income tax and the VAT, both of which increased by over 10 percent in January and February.

By Li Qiaoyi

Source: Xinhua
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