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People's Daily Online>>China Business

Minister explains why fiscal revenue grows faster than GDP

(Xinhua)

08:33, March 07, 2012

Chinese Finance Minister Xie Xuren speaks during a press conference of the Fifth Session of the 11th National People's Congress (NPC) on fiscal policy and related issues in Beijing, China, March 6, 2012. (Xinhua/Ju Huanzong)

BEIJING, March 6 (Xinhua) -- Chinese Minister of Finance Xie Xuren on Tuesday tried to clear up some public misunderstandings about the country's rapidly expanding fiscal revenue, saying price factors have contributed to these misunderstandings.

Xie's remarks came in an attempt to soothe public discontent over much faster fiscal revenue growth possibly cutting into the people's ability to benefit from the country's rapid economic growth.

"Fiscal revenue has kept growing rapidly over the past few years," Xie said at a press conference. "It was the combined result of a sound and rapidly expanding economy and increasing corporate profits and income."

China's fiscal revenue grew 24.8 percent year-on-year to hit a record-high 10.37 trillion yuan (1.64 trillion U.S. dollars) in 2011, compared with 9.2-percent growth in its gross domestic product (GDP).

The fiscal revenue collected in 2011 also exceeded the government's target of 9.122 trillion yuan for which it had budgeted last year, raising public concerns that the Chinese people may come to bear a tax burden that is too heavy.

Xie attributed the rapid increase in fiscal revenue to the government's moves to bring all extrabudgetary funds under budgetary management, which added about 250 billion yuan to the country's fiscal revenue.

According to the finance minister, China's fiscal revenue -- tax revenue, in particular -- is calculated according to nominal prices, while the GDP calculation is based on prices adjusted for inflation.

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