China's fiscal revenue growth slows in May

BEIJING - China's fiscal revenue registered slower growth in May, climbing 3.7 percent year on year to 1.61 trillion yuan ($236.95 billion), the Ministry of Finance (MOF) said Monday.

The growth retreated from a 7.8-percent gain in April and a 12.2-percent increase in March.

"The growth rate was relatively low," the MOF said in a statement, attributing the slowdown to softened related economic indicators, continued tax breaks and a high base a year ago.

In the first five months, the fiscal revenue climbed 10 percent year on year to 7.72 trillion yuan.

The income from value-added tax (VAT), which accounted for nearly 30 percent of tax revenue last month, dropped 13.8 percent from a year ago to 404 billion yuan.

As a major move in tax reductions, China expanded VAT to the whole economy in May 2016 to lower corporate burdens, with all other business taxes abolished.

The MOF estimated falling VAT income dragged down the total tax revenue growth by 8.4 percentage points in May.

Income from vehicle purchase tax increased 24.8 percent from a year ago earlier thanks to robust car sales, and the income from deed tax gained 28.9 percent. The income from resources tax jumped 67.2 percent due to rising mineral prices and the carryover effect.

Monday's data also showed that in May the central government collected 795 billion yuan in fiscal revenue, down 3.6 percent year on year, while local governments saw fiscal revenue expand 12 percent to 812 billion yuan.

In May, fiscal expenditure was up 9.2 percent year on year to 1.69 trillion yuan, while those in the first five months rose 14.7 percent to 7.65 trillion yuan.

China pledged a more proactive and effective fiscal policy in 2017 to support economic growth, with the government fiscal deficit set at 3 percent of GDP, or 2.38 trillion yuan for the year, a year-on-year increase of 200 billion yuan.