Chinese local gov't fiscal revenue maintains steady growth
MEASURES IN PIPELINE
China's fiscal situation is expected to improve in 2023 with a rebound in the economy, according to research from the CAFS based on surveys with 521 city- and county-level finance departments, adding evidence to a brighter outlook of the nation's local finances.
However, given the facts that the impact of the pandemic is yet to dissipate completely and spending in key areas continues to rise, experts noted that the local governments' fiscal condition is likely to remain in a "tight balance."
"Excluding VAT and corporate income tax, revenues from other taxes grew slowly or even declined in Q1," Feng said, adding that the foundation for economic recovery is yet to be consolidated.
Fiscal departments at all levels are rolling out more measures to ease the financial strains.
The central government has pledged to provide more transfer payments to local authorities to help them deal with financial droughts caused by factors including massive tax and fee cuts. The size of these payments is expected to hit 10.06 trillion yuan this year, the highest level in recent years.
The country also decided to allocate another 500 billion yuan of transfer payments to local governments to support tax and fee cuts and basic livelihoods.
The central government also unveiled measures including asking central and local authorities to reduce general spending, establishing a regular mechanism to directly allocate budgetary funds to lower-level governments and intensifying local fiscal operations monitoring.
Some local authorities are also exploring ways to fill their coffers. The eastern province of Fujian, for instance, has expanded fiscal revenue by actively mobilizing state-owned resources. The income generated from the paid use of the state-owned resources topped 30.88 billion yuan in Q1, surging over 60 percent year on year.
With the recovery of the economy and the real estate market, the sustainability of fiscal operations at local levels will improve, said Bai Yanfeng, a professor with the Central University of Finance and Economics.
