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China’s Fiscal Revenue Slows Down, with Non-tax Revenue Filling the Gap

The Ministry of Finance’s statistics show that the fiscal revenue for January-September was 9.1 trillion yuan (US$1.5 trillion), an increase of 892.5 billion (US$143 billion) or 10.9% over the same period last year and 18.6 percent points lower than the growth for the same period last year. The tax revenue was 7.7 trillion yuan (US$1.2 trillion), a year-over-year increase of 8.6 percent, down 18.8 percent from the same period last year.

According to an official from the Ministry, since the beginning of this year, due to the downward macroeconomic pressure, the local fiscal revenue growth turned weak. To compensate for the gap, non-tax revenues, or various types of fees, are becoming an increasing source of fiscal revenue.

For the first three quarters of 2012, the non-tax revenue in many provinces and cities has grown far more than the tax revenue. Tianjin saw an increase in non-tax revenue (54.75%) that was more than 40 percentage points higher than the increase in tax revenue (10.86%); Anhui’s non-tax revenue (52.1%) increased more than 30 percentage points more than tax revenue (15.3%); Guangdong had non-tax revenue (25.89%) growing higher than the tax revenue (8.15%) of nearly 18 percentage points. In some places, imposing fines has become an important part of the non-tax revenue.

Source: Nanfang Weekend, October 30, 2012