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Economic downshift bites into China's 2012 fiscal revenues

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BEIJING, Jan. 22 (Xinhua) -- China's fiscal revenue growth slowed sharply in 2012 due to an economic downshift and tax breaks, the Ministry of Finance (MOF) said Tuesday.

National fiscal revenues rose 12.8 percent year on year to 11.7 trillion yuan (1.9 trillion U.S. dollars), with the growth rate dropping 12.2 percentage points from a year earlier, the MOF said in a statement.

The ministry attributed the slowdown to a softening economy, weakening corporate profits, milder inflation and structural tax breaks.

Of the total fiscal revenues, tax revenues reached 10.1 trillion yuan, up 12.1 percent from a year earlier, but the growth rate was down 10.5 percentage points from the 2011 level.

Fiscal revenues in China include taxes, as well as administrative fees and other government income, such as fines and income from state-owned assets.

Revenues from value-added taxes increased 8.9 percent to 2.6 trillion yuan, while those from business taxes went up 15.1 percent to 1.6 trillion yuan.

Corporate income tax revenues gained 17.2 percent year on year to 2 trillion yuan.

Individual income tax revenues dipped 3.9 percent to 582 billion yuan, affected by the government's move in September 2011 to raise the threshold at which individuals must pay income taxes from 2,000 yuan to 3,500 yuan.

The central government collected 5.6 trillion yuan in fiscal revenues in 2012, up 9.4 percent year on year, while local governments saw fiscal revenues grow 16.2 percent to 6.1 trillion yuan.

On a quarterly basis, China's fiscal revenue growth recovered to 19.9 percent in the fourth quarter of 2012 from 14.7 percent in the first quarter, 10 percent in the second and 8.1 percent in the third quarter.

The fourth-quarter rebound was mainly caused by a low base in the same period of 2011, the MOF said.

China's economic growth quickened to 7.9 percent in the fourth quarter of 2012, ending a seven-quarter slowdown after the government cautiously eased its monetary policy and fast-tracked investment projects.

However, impacted by the faltering global economy and a cooling domestic property market, the world's second-largest economy still recorded its slowest annual growth rate since 1999, expanding 7.8 percent in 2012.

The government has vowed to maintain a proactive fiscal policy and prudent monetary policy in 2013.

The country's total fiscal expenditures climbed 15.1 percent year on year to 12.6 trillion yuan in 2012, according to MOF data.

Spending on education recorded the fastest growth, surging 28.3 percent to 2.1 trillion yuan.

The central government spent 6.4 trillion yuan in 2012, including 4.5 trillion yuan in tax rebates and transfer payments given to local governments.

Local governments saw outlays rise 15.3 percent to 10.7 trillion yuan in 2012, the MOF data showed.

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