Fiscal revenue growth to slow: report

Economic slowdown, reform measures cut govt income

China's fiscal revenue growth is expected to drop to a 23-year low of 8.6 percent in 2014, a media report said on Monday, at a time when the government plans to spur the slowing economy with further fiscal spending in infrastructure construction.

Total fiscal revenue in China is likely to drop to a single-digit growth in 2014, the first time since 1991, Beijing-based newspaper Economic Information Daily reported on Monday, quoting an anonymous source.

In response to a request for comment by the Global Times, the Ministry of Finance (MOF) said it is still finalizing the official fiscal data for 2014, which will be posted on its website soon, without providing details.

According to the latest data from the MOF, the country's fiscal revenue grew 9.1 percent year-on-year in November, while the figure for the January-November period rose 8.3 percent to nearly 13 trillion yuan ($2.1 trillion).

Amid a slowing economy and under-performing property market, it will be normal to see weaker growth in the fiscal revenue in 2014 compared with the 10.1 percent rise in the previous year, Jiang Zhen, a research fellow at the National Academy of Economic Strategy under the Chinese Academy of Social Sciences, told the Global Times on Monday.

China's GDP growth in 2014 is scheduled to be officially unveiled by the National Bureau of Statistics on Tuesday, and analysts estimate the growth rate to drop to 7.3-7.4 percent from 7.7 percent in 2013.

A raft of reform measures in China's taxation system, launched last year to reduce tax burden on companies and spur the slowing economy, have also contributed to the lower growth in fiscal revenue, Cui Jun, a professor at the School of Public Administration and Policy of the Renmin University of China, told the Global Times on Monday.

For instance, China's value-added tax reform resulted in a tax reduction of 85.1 billion yuan for businesses in the first half of 2014, according to data from the State Administration of Taxation.

Following the reforms in the country's taxation system, China's total fiscal revenue growth is expected to be in line with its economic growth in the coming years, which will remain in a single-digit range, Jiang said.

Ahead of the official release of the national fiscal income figures, a number of local governments including Beijing have reported a sharp drop in their fiscal revenue growth in 2014.

For instance, East China's Fujian Province saw its fiscal revenue growth slow to 11.5 percent in 2014 from 19.3 percent in 2013.

Amid the slowing fiscal income, local governments are calling for more private capital in infrastructure construction in a bid to spur the local economy under the Public-Private-Partnership (PPP) investment model, according to Cui.

China is accelerating 300 infrastructure projects valued at 7 trillion yuan in 2015 to help stabilize the economy, according to a Bloomberg report on January 6.

The government is expected to maintain proactive fiscal policy this year, Jiang said.