The government's revenue fell 17.1 percent from a year earlier in January, as the economic downturn hurt corporate profits and recent tax cuts took effect.
Revenue fell to 613.16 billion yuan in January, the Ministry of Finance said on its website yesterday. The central government received 296.48 billion yuan in January, down 28.4 percent from a year earlier, while local governments chalked up 316.68 billion yuan, down 2.7 percent from a year earlier.
Revenue had increased 19 percent during 2008.
The ministry said last month's steep decline in revenue was mainly due to the economic slowdown, which led to lower corporate profits. Corporate income tax growth dropped 24.8 percent from a year earlier in January.
The government's move to offer tax cuts also made a dent in its coffers, the ministry said.
Over the past year, China has slashed stamp tax for stock trading and raised tax rebates for textile and garment exports. For instance, it handed out 63.42 billion yuan in tax rebates for exporters, up 25 percent from a year earlier...
The Spring Festival played a role in sluggish revenue collections, the ministry said.
"The government is facing an even tighter fiscal situation in 2009," said Li Zhikun, analyst with China Securities Co. "Its revenues are likely to further drop this year."
Ha Jiming, an economist with China International Capital Corp, had estimated earlier that the government would have to issue 1.3 trillion yuan worth of treasury bills to fund its stimulus package. That is a 70-percent jump compared to the 750-billion yuan worth of bills it issued in 2008.
Source: China Daily
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