China's H1 fiscal revenue growth slows down

China's fiscal revenue growth decelerated to 7.5 percent in the first half due to a continuous economic slowdown and the country's structural tax reforms.

Total fiscal revenue stood at 6.86 trillion yuan (1.12 trillion U.S. dollars) in the first six months, according to data released by the Ministry of Finance on Monday.

The pace was 4.7 percentage points lower than the same period of last year, and slightly lower than the country's economic growth in the first half, said the ministry.

China's economy growth further eased to 7.6 percent in the first half, after it slowed to 7.8 percent last year, the weakest since 1999, data from the National Bureau of Statistics showed on Monday.

The ministry said the central government saw fiscal revenue for the first six months rose by only 1.5 percent over the same period last year to 3.23 trillion yuan. It is having a difficult time to achieve the full-year fiscal revenue growth target of 7 percent.

Revenue 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 revenue, said the ministry.

Local governments' fiscal revenue during this period expanded 13.5 percent from a year earlier to 3.63 trillion yuan, driven up by rising income from sharp increases in housing transactions, said the ministry.

In June alone, fiscal revenue reached 1.24 trillion yuan, up 12.1 percent from a year earlier,the ministry's figures showed.

The ministry said the growth rate of fiscal revenue will not be high in the second half of the year due to weak economic expansion, tax-cutting policies and stabilized property transactions.

A pilot program to reduce the tax burden of Chinese companies through replacing the business levy with a value-added tax will be expanded to more regions in the second half, which will further cut the fiscal revenue, said the ministry.

As to expenditure, the ministry said government spending for the first six months rose 10.8 percent to 5.97 trillion yuan, with central government spending increasing 8.1 percent and local governments' spending rising 11.3 percent during this period.

The Chinese government is spending more on areas to improve people's livelihood, with expenditure on education rising 10.7 percent, medical and health services up 22.3 percent, and energy-saving and environmental protection up 14.1 percent, said the ministry.