China’s budget revenues decreased due to COVID restrictions
2023.01.30 10:37
China’s budget revenues decreased due to COVID restrictions
By Kristina Sobol
Budrigannews.com – According to data from the finance ministry released on Monday, China’s fiscal revenue increased by 0.6 percent in 2022 compared to the previous year. This was a sharp slowdown from the 10.7 percent increase in 2021, when businesses received massive tax breaks to help the COVID-ravaged economy.
The ministry said in a statement that fiscal expenditures reached 26.06 trillion yuan, a 6.1% increase from the previous year’s total of 20.37 trillion yuan ($3.02 trillion).
As a result, there was a 5.69 trillion yuan shortfall.
The ministry reported that after taking into account the effect of rebates for value-added tax (VAT), revenues increased by 9.1 percent in 2022.
The second-largest economy in the world expanded by 3% in 2022, far below the official target of 5% and one of its lowest rates in nearly 50 years. After Beijing dropped its severe COVID restrictions at the beginning of December, growth is anticipated to rebound to nearly 5% in 2023.
According to the ministry, China will improve tax and fee policy to support businesses facing difficulties, set a reasonable amount of special local government bonds to encourage investment, and appropriately expand fiscal expenditures in 2023.
According to the ministry, China’s tax and fee reductions, tax refunds, and deferred payments in 2022 totaled 4.2 trillion yuan, including 2.4 trillion yuan in VAT tax rebates—the largest in recent years.
In 2022, revenues from government land sales fell by 23.3 percent amid a prolonged property crisis.
China’s fiscal spending increased by 3.0% in December, while fiscal revenue increased by 61.1 percent from the previous year.
To avoid systemic risks, the ministry pledged to limit new government hidden debt and regulate LGFVs, typically investment firms that raise money and construct infrastructure projects on behalf of local governments.
More:
EU business sentiment continues to recover in January
Unexpected decline of German economy in 4Q
