Jin Renqing, China's Finance Minister announced a leap of China's fiscal revenue for the first 11 months of the year which set a historic record of 2.6 trillion yuan (317 billion USD), 460 billion yuan more than the same period of last year or an increase of 23.5 percent. This makes the country enjoy a fiscal surplus of 283.6 billion yuan (34.58 billion USD). He also illustrated the revenue sources and expenditure.

He firstly highlighted the sound rapid growth of the national economy and better performance of enterprises. In China's tax mix, value added taxes, consumption taxes and operation taxes contribute half of the whole ingredients, which are complemented with 20 percent imports related taxes and 30 percent income taxes including personal income taxes.

However, Jin also noted "a considerable part" of the so-called lump-sum payment. Around 100 billion yuan has been generated by the spree of investment on fixed assets. According to China's tax policy, there is a value added tax on production.

Another source of the lump-sum payment is created by the new tax rebate system which has reduced the tax cuts by 3 percentage points. This, plus the coincidental action of tax rebates applications by enterprises in the 4th quarter of last year, has kept about 100 billion yuan tax intact.

The lump-sum payment, Jin said, is not allowed to be arranged for current expenditures.

Jin also detailed about how the bulging revenue has been used, an issue of the concern of the public.

Much support has been given to the agriculture. The tax exemption, tax reduction and subsidies for farmers cost 16 billion yuan. The social security has got another 10 billion yuan which was paid to the retired, the minorities and the underprivileged. Bills payable including tax rebates and the program of restoring forestry from farmland has been settled which used to be repaid by treasury bonds. This has erased 140 billion yuan of fiscal deficit.

Investment on education, science and technology, culture and sports has also increased. Money has also been spent on enterprises reform, including mergers and acquisitions, bankruptcy, etc.

Funds of disaster relief have been earmarked.

Jin clarified that a prudent fiscal policy for next year would not suggest a passive attitude. The purpose of the prudent fiscal policy, he stressed, was to eliminate unhealthy and unstable elements in the current economic operation.

He believed in a brighter prospect for the economy and fiscal situation in 2005. The support to the development of the country's west, rejuvenation of the old industrial base in the northeast and the rise of the central region will be as generous as this year.

Jin confirmed the consistency in the favorable policies to benefit farmers. He further pledged to extend more support to the rural areas, farmers and agriculture.

By People's Daily Online