China's fiscal revenue growth slows in Q1

[BEIJING] China's annual fiscal revenue growth slowed to 3.9 per cent in the first quarter from 8.6 per cent in 2014, official data showed, as persistent economic weakness dampened tax collection and other government incomes.

Revenues totalled 3.64 trillion yuan (S$808.96 billion) in the first quarter, data from the Finance Ministry showed on Thursday.

In March, China's fiscal revenues totalled 1.069 trillion yuan, up 5.8 per cent from a year earlier, the ministry said.

The pick up in March helped the three-month growth rate accelerate from 3.2 per cent for the first two months of this year.

The government has changed its methodology for estimating revenues, making comparisons against the same quarter a year ago misleading.

However, the ministry's new methodology did show first quarter revenue growth was well below the 8.6 per cent growth seen in 2014.

A breakdown of the figures showed business tax receipts from the real estate sector fell 4.8 per cent to 145.2 billion yuan in the first quarter as China's housing industry stumbled.

China's cooling housing sector, which accounts for about 15 per cent of the Chinese gross domestic product, has been an increasing drag on the world's second-biggest economy as a glut of unsold homes dampened home prices and property investment.

Reflecting the sagging housing sector, government revenue earned from selling state land tumbled 36.1 per cent.

Collection of personal income taxes rose 12.8 per cent to 266.6 billion yuan in the January-March period, while corporate income taxes rose 7.7 per cent to 609.8 billion yuan.

Consumption tax and import value-added tax fell 13 per cent to 289.5 billion yuan, while tariffs fell 8.5 per cent to 60.8 billion yuan as plunging crude oil, iron ore and commodity prices reduced the value of imports.

On the other side of the ledger, fiscal expenditure rose 7.8 per cent in the first quarter of this year to 3.28 trillion yuan, lagging an average rise of 8.2 per cent in 2014.

March fiscal expenditures rose 4.4 per cent from a year earlier to 1.395 trillion yuan, the ministry said.

Government spending on social security and employment climbed 12 per cent to 540.3 billion yuan in the January-March period, and expenditure on housing benefits for low-income groups rose 10.7 per cent to 67.7 billion yuan.

The government has set a wider budget deficit for 2015 to step up spending and support the slowing economy. Annual economic growth slowed to a six-year low 7 per cent in the first quarter as demand at home and abroad faltered.

REUTERS